Spain Tax Havens 2026: Madrid vs. Andalusia vs. Basque Country

Navigating Spain’s Fiscal Fragmentation in 2026

Spain is not a monolith when it comes to taxation. Your choice of autonomous community can result in a difference of tens of thousands of euros in annual tax liability. For high-net-worth expats, the decision of where to reside is as much a financial strategy as it is a lifestyle choice.

Regional Wealth Tax (Patrimonio) Comparison

The Wealth Tax is the most controversial element of the Spanish system. While the national government maintains a Solidarity Tax on large fortunes, many regions have used their autonomy to effectively eliminate the standard Wealth Tax.

• Madrid: Offers a 100% bonus on Wealth Tax. This has turned the capital into a primary destination for international capital and corporate headquarters.
• Andalusia: Mirrors Madrid with a 100% bonus. This makes the Costa del Sol particularly attractive for those with significant global assets.
• Basque Country: Operates with a higher degree of independence. While they do have a wealth tax, the thresholds and exemptions are managed locally, often providing a more predictable fiscal roadmap.
• Valencia and Catalonia: These regions generally maintain higher wealth tax rates and lower exemption thresholds. In 2026, residents here face a more progressive and burdensome tax scale.

The Basque Country: The “Foral” Advantage

The provinces of Álava, Bizkaia, and Gipuzcoa offer a distinct advantage for entrepreneurs. Because they manage their own tax collections, they can offer bespoke incentives for investment in local startups and innovation. If you are moving to Spain to launch a high-growth company, the Basque fiscal regime often provides a more favorable corporate tax landscape than the “Common Regime” regions.

Strategic Relocation for Inheritance Planning

In 2026, inheritance and gift tax (Impuesto sobre Sucesiones y Donaciones) remains a regional matter. Madrid and Andalusia offer a 99% relief for Group I and II heirs (spouses and children). This means that for the vast majority of expat families, moving to these regions effectively eliminates the fear of double taxation on inherited assets. In contrast, moving to Asturias or certain parts of Northern Spain can result in significantly higher inheritance costs.

FAQs

Can I live in Madrid but pay taxes in Andalusia?

No. You must pay taxes in the region where you have your habitual residence. This is generally defined as the place where you spend more than 183 days per year. The Spanish Tax Agency uses utility bills, school records, and bank transactions to verify your actual place of residence.

What is the 2026 Solidarity Tax threshold?

The national Solidarity Tax applies to individuals with a net wealth exceeding €3 million. While regional bonuses can eliminate the “Wealth Tax” (Patrimonio), they cannot override this national levy. However, the amount paid in regional wealth tax is generally deductible from the Solidarity Tax bill.

Fiscal planning is a pillar of a successful relocation. To model your 2026 tax liability across these three regions, book a session with our Senior SEO Architect and financial team.