The Planeta building, with its striking green curtain of hanging gardens, is one of Barcelona’s most iconic office towers. Earlier this summer, it was bought by Spain’s richest man, Amancio Ortega—founder of the Zara fashion empire—as part of a property-buying spree.
Through his family investment firm, Pontegadea, Ortega also recently acquired the five-star Hotel Banke in Paris, an apartment building in Florida, and a 50% stake in the operator of England’s Teesport. These additions expand his already massive €20bn property portfolio.
So why the sudden spending?
This year, Ortega is set to receive a record €3.1bn (£2.7bn) dividend from his shares in Inditex, Zara’s parent company. Reports suggest he’s quickly reinvesting the windfall, possibly to avoid wealth taxes. However, sources close to Pontegadea told The Guardian that the firm isn’t investing to dodge taxes but to fulfill its mission: “to grow and preserve wealth across generations.” They added that all dividends from Inditex—and any other income—are reinvested annually, regardless of the amount.
Whatever the reason, Ortega’s property empire has grown rapidly, making his family office one of Europe’s biggest real estate owners.
As European governments scramble to repair public finances after years of global crises, there’s growing pressure to tax the ultra-wealthy more effectively. Spain is one of only three European countries (along with Switzerland and Norway) that still impose wealth taxes, and policymakers are watching closely to see what works—and what doesn’t.
In the UK, former Labour leader Neil Kinnock and ex-shadow chancellor Anneliese Dodds are among those urging Rachel Reeves to introduce a wealth tax in her upcoming budget. Options under consideration include changes to inheritance tax, but some Labour MPs are pushing for a 2% annual levy on assets over £10m—a move they claim could raise £24bn.
France recently debated a similar tax targeting fortunes above €100m, which passed the lower house but was rejected by the senate.
Wealth taxes, which take a yearly percentage of a person’s assets, were once common but have largely been replaced by taxes on transactions—like dividends, inheritances, and property sales.
### Spain’s Wealth Tax Battle
Spain’s wealth tax dates back to 1978, during its transition to democracy after Franco’s dictatorship. Regional governments collect the revenue, a system that worked well until the financial crisis. After a brief pause, the tax was reinstated in 2011—but Madrid’s conservative government slashed its rate to zero. This move attracted wealthy residents, including Real Madrid’s high-earning footballers and Latin American investors, driving up property prices.
In 2022, Andalucía followed suit, cutting its wealth tax rate to zero. Madrid’s regional leader cheekily welcomed Andalusians to “paradise” (a play on paraíso fiscal, or tax haven). Soon after, Galicia—where Ortega resides for tax purposes—offered a 50% discount.
With hundreds of millions in revenue for local services, including healthcare, now at risk, a political battle erupted. Spain’s socialist-led central government, under Prime Minister Pedro Sánchez, stepped in to defend the tax, setting the stage for a clash with wealthy regions.In December 2022, Prime Minister Pedro Sánchez introduced a solidarity tax on large fortunes to help cover public spending after the pandemic. Initially set for two years, it has since been extended until regional financing is revised—something unlikely to happen soon. The tax was designed so that any revenue lost by regional governments would be collected by the central government instead. It applies to worldwide assets, starting at 1.7% for net wealth over €3 million and rising to 3.5% for fortunes exceeding €10 million.
There are exemptions: the first €700,000 is tax-free, as is €300,000 for a primary residence. A cap ensures that combined income and wealth taxes don’t exceed 60% of a taxpayer’s income, protecting those who are asset-rich but cash-poor.
According to Spain’s Treasury, the tax raised €1.88 billion in its first year (2023), with €1.25 billion going to regional governments and €630 million to the central government. In 2024, regions kept the revenue for themselves, increasing the total to €2 billion.
Dirk Foremny, an economics professor at the University of Barcelona, explains that the tax isn’t primarily about raising central government revenue but rather pressuring regions to collect more. In that sense, it has worked. While the sums are modest compared to income tax (which brings in €130 billion annually), they match inheritance tax revenues (around €3 billion). Foremny argues the tax has social value, helping redistribute wealth and prevent excessive concentration of economic—and political—power.
Despite warnings of a mass exodus of the wealthy, Spain’s richest have largely stayed. Forbes counted 26 Spanish billionaires in 2021; today, there are 34, with a combined net worth exceeding $200 billion. Marc Debois of FO-Next notes that most wealthy individuals filed legal appeals or restructured their finances rather than leaving. Only a few relocated—enough to make headlines but not enough to signal a major flight.
Could billionaires pay more? Experts highlight a major loophole: the exemption for “family companies.” Originally meant to support small and medium-sized businesses, it’s also used by the ultra-wealthy to shield assets. While there are rules to prevent abuse—requiring assets to be used for business, not just investment—abolishing the exemption could backfire. Debois predicts billionaires would respond by leveraging debt or moving holdings to tax-friendly jurisdictions like Luxembourg. More critically, ending the exemption would hurt thousands of mid-sized family businesses, making it politically risky.
Julio López Laborda, a public economics professor, estimates that 80% of the wealthiest 1%’s assets escape the tax due to such exemptions. Meanwhile, cutting public services to fund tax breaks or balance budgets risks creating a damaging cycle of decline.The company tax exemption could cost the Treasury around €2 billion, while the cap on taxes as a percentage of income, mentioned earlier, might result in another €2.5 billion going uncollected.
Susana Ruiz, Oxfam’s tax justice policy lead, who is collaborating with López Laborda on an upcoming report about wealth taxes, says: “We could be collecting at least two to three times more revenue than we currently are.”
Cutting public services to fund tax breaks or simply balance the budget can create a vicious cycle. Reducing service quality erodes public trust in taxation, which relies on broad agreement. In Madrid, declining healthcare standards fueled frustration among workers and reinforced the perception that private services were more efficient, Ruiz explains. She believes the solidarity tax has helped restore confidence. “There’s strong public support for it. It reinforces the idea that the system is fair.”
So far, there’s no evidence the tax has hurt growth. Spain was the fastest-growing major advanced economy last year, expanding by 3.2%—even outpacing the U.S. In contrast, the UK and France saw growth barely above 1%. From the balconies of the Planeta building to the rest of the country, signs of prosperity are thriving.
FAQS
### **FAQs: How Spain Introduced Wealth Taxes Without Scaring Off Billionaires**
#### **Beginner-Level Questions**
**1. What is a wealth tax?**
A wealth tax is a levy on the total value of a person’s assets rather than just their income.
**2. Why did Spain introduce a wealth tax?**
Spain implemented it to reduce inequality and generate revenue for public services, targeting ultra-high-net-worth individuals without overburdening the middle class.
**3. Did billionaires leave Spain because of the wealth tax?**
Not significantly. Spain designed exemptions and regional adjustments to prevent mass departures while still collecting revenue.
**4. How does Spain’s wealth tax differ from income tax?**
Income tax applies to earnings, while wealth tax targets accumulated assets.
**5. Who has to pay Spain’s wealth tax?**
Residents with net assets over €700,000. Non-residents pay only on Spanish-based assets.
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#### **Intermediate-Level Questions**
**6. What exemptions make Spain’s wealth tax manageable for the rich?**
Key exemptions include:
– Primary homes.
– Business assets.
– Pension funds and certain investments.
**7. How do regional differences affect Spain’s wealth tax?**
Some autonomous regions offer big discounts or exemptions, letting wealthy residents minimize payments legally.
**8. What stops billionaires from moving to tax havens?**
Spain enforces exit taxes and has agreements with other countries to track tax evaders.
**9. How much revenue does Spain’s wealth tax generate?**
About €1.5 billion annually—small compared to income tax but symbolically important for fairness.
**10. Are there loopholes billionaires use to avoid the tax?**
Some shift assets to family trusts or invest in exempt categories, but audits and transparency laws limit abuse.
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#### **Advanced-Level Questions**
**11. How does Spain’s wealth tax compare to other countries?**
Most European nations scrapped wealth taxes (France
