For non-residents who own property, investments, or other assets in Spain.

You do not live in Spain. You have perhaps lived there in the past, or you visit regularly, or you own a property on the coast that you bought as an investment or a holiday home. You may have a brokerage account holding Spanish equities, or a Spanish-situs bond portfolio. You have moved on — to London, to Dubai, to Geneva — and Spain is somewhere in the background of your financial life rather than its centre.

But Spain has not moved on from you. Spanish-situs assets — property, shares in Spanish companies, certain financial instruments with a Spanish connection — attract Spanish tax on capital gains, Spanish wealth tax on annual net asset values, and Spanish succession tax on death. And until very recently, non-residents were denied a protection that residents could claim: the right to cap the combined wealth tax and income tax burden at 60% of the income tax base. Non-residents paid more, simply because they lived elsewhere.

In October and November 2025, the Spanish Supreme Court ruled that this was unlawful. Two landmark decisions — delivered on 29 October and 3 November 2025 — confirmed that excluding non-residents from the joint personal income tax and wealth tax limit constitutes unjustified discrimination under EU free movement of capital principles. The ruling applies not just to EU residents but broadly to non-residents regardless of domicile.

The consequence is concrete and immediate: non-residents who have paid Spanish wealth tax in 2021, 2022, 2023, or 2024 may have overpaid. Refund claims can be filed for open years, subject to a four-year statute of limitations. The window for 2021 is closing. The window for later years remains open. This is not a theoretical point — it is a specific financial opportunity for a specific group of people.

Two Spanish Supreme Court rulings in late 2025 confirmed that non-residents have been unlawfully excluded from a key wealth tax protection. Refund claims for years from 2021 are available now.

Understanding the joint limit — what changed

Under Spanish law, a resident taxpayer can apply a joint limit on their combined IP (Impuesto sobre el Patrimonio) and IRPF (personal income tax) liability: where the combined charge exceeds 60% of the PIT taxable base, the IP charge is reduced accordingly, subject to a minimum of 20% of the IP liability remaining payable.

This limit is a meaningful protection for clients with significant assets generating modest income returns — for example, a property-heavy portfolio where the wealth tax charge exceeds the income the assets generate. For a non-resident holding a EUR 1.5 million Spanish property generating EUR 30,000 in rental income, the effective wealth tax charge under the standard national scale could produce a combined IP and IRNR bill that exceeds 60% of their Spanish income tax base. Under the old rules, non-residents could not claim the limit. Under the new rules, they can — and they can recover the excess for years still within the limitation period.

Filing a refund claim requires calculating the joint limit for each open tax year, comparing it to the IP actually paid, and submitting the appropriate rectification request to the Agencia Tributaria. This is a process that requires a qualified Spanish tax adviser with experience in non-resident filings. But the starting point is identifying whether you have paid Spanish IP as a non-resident in 2021 or later, and if so, quantifying the potential recovery.

Spanish property — what non-residents actually owe

If you own Spanish real estate as a non-resident, here is the current tax picture:

• Annual IP (wealth tax): applies to your net Spanish assets at national rates (0.2% to 3.5%), now subject to the joint PIT/WT limit you may have been incorrectly denied.
• IBI (Impuesto sobre Bienes Inmuebles): annual local council tax on the property, assessed on the cadastral value. Non-residents pay this in the same way as residents.
• Capital gain on disposal: if you sell Spanish property, the gain is taxed at 19% for EU/EEA residents, or 24% for non-EU/non-treaty non-residents. The purchaser is required to withhold 3% of the gross sale price from the payment to you — this is a prepayment against any capital gains tax liability, and the excess is refundable.
• Inheritance tax (ISD): Spanish property owned by a non-resident is subject to Spanish succession tax on death. Non-resident heirs can now apply the regional bonuses of the territory where the property is located, following the 2021 Supreme Court ruling — an improvement from the prior national-rates position.

What does PPLI do for non-residents with Spanish assets?

PPLI cannot hold Spanish real property directly. A Luxembourg or Liechtenstein insurer does not acquire land or buildings. So if your Spanish asset is a Marbella villa, PPLI is not a mechanism for holding the property differently.

Where PPLI becomes relevant for non-residents with Spanish connections is in the planning of the liquid financial portfolio alongside the property. Consider the following profile: a UK national, non-resident in Spain, holding a EUR 1.2 million Marbella apartment and a EUR 2.5 million investment portfolio currently held in a UK brokerage account. The UK portfolio is outside Spain. It does not currently attract Spanish IP (as a non-resident, only Spanish-situs assets are in scope). It does not generate Spanish IRNR (the income is UK or foreign-sourced). It sits at arms’ length from the Spanish tax system.

But on the client’s death, the Spanish property creates a succession tax problem. The heirs — whether UK or Dubai-based — face Spanish ISD on the Marbella apartment. The regional bonus may significantly reduce this, but the process requires engagement with the Spanish succession system, the appointment of local notaries, and potentially a waiting period before the property can be dealt with.

Structuring the UK investment portfolio inside a Luxembourg PPLI policy changes the succession picture for the liquid assets. On the policyholder’s death, the policy proceeds are paid to named beneficiaries in accordance with the policy terms — directly, swiftly, and outside the Spanish succession process. The policy is a Luxembourg-issued insurance contract; it is not a Spanish-situs asset. The heirs receive the liquid portfolio proceeds without Spanish ISD, without Spanish probate, typically within weeks of submitting a death certificate.

The Spanish property succession issue remains — but the overall estate has been simplified. The executors deal with one problem (the Marbella apartment and Spanish ISD) rather than two.

A Luxembourg PPLI policy is not a Spanish-situs asset. On death, the proceeds go to named beneficiaries directly — without Spanish succession tax, without Spanish probate, on a timescale measured in weeks rather than months.

The pre-residency planning window

There is a third group for whom this article is most directly relevant: people who are not currently Spanish residents but are actively considering becoming one.

The Beckham Law — the Regimen especial de impatriados under Article 93 LIRPF — gives qualifying new arrivals in Spain up to six fiscal years during which foreign-source income and gains are not subject to Spanish income tax. For a client who establishes a PPLI policy before arriving in Spain, the combination is particularly powerful: the policy is already in place from day one of the Beckham window, the portfolio begins compounding tax-free from the moment Spanish residency is established, and the structure continues to defer taxes after the Beckham window closes.

The 2023 reform to the Beckham Law extended eligibility to remote workers, digital nomads, and entrepreneurs. Many internationally mobile clients considering Spain as a European base will qualify. The critical point is timing: a PPLI policy must be established before or at the very start of the Beckham window to capture the full benefit. Pre-departure structuring — while the client is still in the UAE, UK, or Switzerland — is both possible and preferable.

For any client who asks their adviser: ‘I am thinking of moving to Spain — what do I need to know?’ — the answer should include the Beckham Law, and the Beckham Law conversation should include PPLI.

The refund process — immediate steps

For non-residents who have paid Spanish wealth tax on Spanish-situs assets in 2021, 2022, 2023, or 2024, the process for claiming a refund under the joint PIT/WT limit is:

• Engage a qualified Spanish tax adviser with non-resident expertise to review your IP filings for each open year.
• Calculate the joint limit for each year: 60% of the PIT taxable base (IRNR liability on Spanish-source income in that year), compared to the IP actually paid.
• Where the IP paid exceeded the limit, calculate the recoverable amount (subject to the 20% minimum IP floor).
• File a rectification request (solicitud de rectificacion de autoliquidacion) with the Agencia Tributaria for each affected year.
• Monitor the claim and respond to any requests for additional information.

The 2021 year is the most urgent: depending on the exact filing dates, the four-year limitation period may be close to expiry. Years 2022 through 2024 have more time, but early action is preferable to last-minute filings.

A summary: what non-residents with Spanish assets should consider

PPLI.Solutions works with professional advisers and their clients across Spain and internationally. If you are a non-resident with Spanish assets, or an adviser with clients in this position, we are available to discuss the specific implications for your situation.