Patrimonio Tax Abolished?

As a pre-election pledge in December 2007, Zapatero promised that he would do away with Patrimonio tax.  He re-confirmed that he would abolish the tax when the socialists acceded to power earlier this year, and again in August.  However we received conflicting advice from Tenerife tax consultants, lawyers and even tax officials. Many of them said that the abolition was not confirmed.  Consequently, we took care to highlight this lack of clarity in the Tenerife Lifeline guide book.  We have all been awaiting the promise to be written into the law, and on 23rd of December, it finally was.  Sort of.  The tax has not actually been abolished, but its rate has been set at zero.

Some pundits suggest that the reason for this is that the government may yet plan to bring the tax back some time in the future.  Therefore it is likely that tax payers will still be asked to provide the information to calculate Patrimonio tax and the zero rate will then be applied to the submission.

The unpopular tax has often confused foreigners as its equivalent does not exist in countries such as the UK.  It was a tax based on the total wealth of an individual, as opposed to any capital gain or income.