Becoming a tax resident in Spain comes with a major shift in how your wealth is reported. Spain taxes residents on their worldwide income, and it also requires the declaration of worldwide assets through the well‑known (and sometimes feared) Modelo 720.
If you’ve recently moved to Spain—or you’ve lived here for years but never understood the rules—this guide breaks down what you must declare, thresholds, deadlines, and when you must file again.
What Does “Tax Resident in Spain” Mean?
You are considered a tax resident in Spain if any of the following apply:
- You live in Spain more than 183 days per calendar year
- Your center of economic interests is in Spain
- Your spouse and minor children live in Spain (presumption of residency)
Once you are a tax resident, Spain requires you to declare certain assets held outside Spain.
What Is Modelo 720?
Modelo 720 is an informative declaration—not a tax payment—where Spanish residents report assets held abroad. It is mandatory and can lead to penalties if ignored.
What Types of Assets Must Be Declared?
Spain divides foreign assets into three categories:
1. Bank Accounts Held Abroad
Examples:
- Current accounts
- Savings accounts
- Fixed‑term deposits
2. Investments and Securities
Examples:
- Shares
- Bonds
- ETFs
- Mutual funds
- Life insurance with cash value
3. Real Estate Located Abroad
Examples:
- Houses
- Apartments
- Land
- Commercial property
Thresholds: When Do You Need to Declare?
You must file Modelo 720 if any of the three asset categories exceed €50,000.
Important: The threshold applies per category, not total.
Examples:
- €60,000 in a foreign bank account → must declare
- €40,000 in foreign bank accounts + €40,000 in foreign investments → no declaration, because neither category exceeds €50,000
- €51,000 in foreign real estate → must declare
Deadline: When Must You File?
The deadline is:
March 31 of the following year
So for assets held in 2025, the declaration is due by 31st March 2026.
Do You Need to Declare Every Year?
Not necessarily.
You only need to file again if:
- Any category increases by more than €20,000, or
- You sell or close an asset previously declared
Examples:
- Your foreign bank account grows from €52,000 to €70,000 → must file again
- You sell your foreign apartment → must file again
- Your foreign investments go from €51,000 to €60,000 → no need to file, because the increase is less than €20,000
If nothing changes significantly, you do not need to submit a new Modelo 720.
What Happens If You Don’t Declare?
Spain used to impose extremely high penalties, but the EU forced Spain to reduce them. Still, failing to declare can lead to:
- Fines
- Tax audits
- Requirement to justify the origin of funds
It’s always safer to file correctly and on time.
Ready to Stay Compliant in Spain?
Declaring worldwide assets can feel overwhelming, but you don’t have to navigate it alone. If you want help understanding whether you need to file, how to gather your documents, or how to prepare Modelo 720 correctly, I’m here to guide you.