In this electoral year the government has abolished the tax on the wealth tax. This abolition takes effect from the 1st of January 2008. Therefore, in 2009 you will no longer have to submit this wealth tax. By applying this new measure, nearly one million taxpayers and 300,000 foreigners will save more than 1,800 million Euros; although this amount will supposedly be collected by the State via other means.

It is the fulfilment of an electoral promise which shall favourably affect the sale of properties to foreigners, since this tax had caused many claims. In addition, according to the Tax Department, the abolition of this tax should be considered within the scope of the European Union since this tax had already disappeared in almost all the other countries. In Spain, this tax was temporarily introduced in 1978 and its main purpose was to obtain information about the taxpayers, which is already obtained by other means; notice that the Spanish Tax Department is one of the most advanced tax departments in the world, technologically speaking. The Tax Department explains that the tax was unfair, since it punished mainly the urban middle class. Moreover, the tax rates could reach a level of 2.5% of the property value, "which is a very high rate", according to the Tax Department. As they explain, this scale was approved thirty years ago when the interest rates were five or six times higher than the current rates.

Technically, the law will not disappear since it will continue to be used as a reference point for other tax rules, but the tax itself does disappear, as well as the duty to submit the declaration. In order to avoid mistakes, the Tax Department has insisted that this tax must be submitted in the Income Tax Return for this year, ending in June, as it corresponds to 2007. "It will be in the Income Tax Return for 2009 when it will no longer be submitted".

The Treasury’s Expert Collective (Gestha) stated today that the possible abolition of the Wealth Tax would benefit around 35,000 citizens, who declare a net worth higher than 1.5 million Euros, saving them 711 million Euros (49.32% of the total tax collection).

In a notice Gestha stated that the communities most positively impacted when this tax disappears will be Catalonia and Madrid, as these have, with 322,725 million Euros, more than half the national wealth.

Spain is one of the countries where this revenue’s control instrument is less important, despite the increase of multimillionaires. In 1981, for example, only three people declared more than 2,500 million pesetas (about 15 million Euros) of net worth, while currently there are almost one hundred of them.

Beginning next year the Government will have to compensate the autonomous communities for the loss of this tax. At the press conference after the Cabinet meeting, the Spanish second vice-president stated that the abolition of the tax would benefit the acquisition of second homes by non-resident citizens, "at a moment in which real estate activity is slowing".

According to the Treasury, the abolition of this tax shall benefit “the middle classes: workers and professionals who invest their savings in properties and investment funds."

After abolishing this tax, Spain will be aligned with most European countries, which have already abolished it. In fact, currently only France and Spain enforce this tax.

Despite the criticism received during the electoral campaign from the people who opposed the abolition of this tax, The Treasury justifies such abolition by arguing that its function has become obsolete: it was established in 1977 as a temporary measure in order to achieve two objectives - a redistributive purpose and a census purpose. But nowadays neither of these premises is fulfilled. Rather, it taxes almost exclusively the savings of the middle classes (the upper classes have financial products to avoid paying tax on their wealth and the lower classes do not pay it).