Personal income tax in Madrid: how much the move actually saves.
Madrid has the lowest regional scale in common-regime Spain, and the gap against Catalonia is real. It is also smaller than the headlines suggest, it is widest in the middle bands rather than at the top, and on income tax alone it rarely justifies the move by itself. The number that does is a different tax entirely.
The first article in this series took Catalonia apart and showed that half of Spanish income tax is set by the community you live in. Madrid is the other end of that scale: five brackets running from 8.5 to 20.5 per cent, the lowest regional tariff among the common-regime communities, unchanged since it was adjusted for inflation with effect from 2023.
The interesting part is not that Madrid is cheaper. It is how much cheaper, at which income, and whether income tax is the right thing to be comparing at all.
Enter your general taxable base — the base liquidable general, not gross salary. Both scales are applied in full, and each region's own personal minimum is used: Madrid substitutes its own figure of 5,956.65 euro in the regional half, where Catalonia applies the state 5,550. A single taxpayer with no children, so the two sides are directly comparable.
The Madrid scale.
Five brackets, set by Ley 13/2023 and adjusted for inflation with effect from 1 January 2023. The thresholds are not round numbers because they are the old ones uprated, which is exactly what deflating a scale means.
| Taxable base | Madrid rate | State rate | Combined marginal |
|---|---|---|---|
| 0 – 13,362.22 | 8.5% | 9.5% | 18.0% |
| 13,362.22 – 19,004.63 | 10.7% | 12.0% | 22.7% |
| 19,004.63 – 35,425.68 | 12.8% | 15.0% | 27.8% |
| 35,425.68 – 57,320.40 | 17.4% | 18.5% | 35.9% |
| 57,320.40 – 300,000 | 20.5% | 22.5% | 43.0% |
| Above 300,000 | 20.5% | 24.5% | 45.0% |
Madrid's top marginal rate is 45 per cent, not 43.
Both figures circulate, and both are defensible depending on what you mean. 43 per cent is the combined marginal between 57,320 and 300,000 euro, which is where almost every high earner actually sits. 45 per cent is the true top, on the part above 300,000. When somebody quotes a single number for Madrid they usually mean the first and say the second, or the reverse.
Madrid raises the personal minimum. Most comparisons miss it.
The previous article explained the mechanism: the personal and family minimum is not deducted from income, it is run through the scale and subtracted from the tax. Madrid does something Catalonia does not — it sets its own figure for the regional half.
5,550 euro in both halves
Catalonia applies the state amounts without modification, in both the state and the regional computation.
5,550 state, 5,956.65 regional
The state half still uses 5,550. In the Madrid half, the region's own higher figure replaces it, which reduces the regional tax by a little more for everybody.
The effect is small in cash — a few tens of euro — and it is worth the same to every taxpayer, because it is charged at the bottom bracket. It is included in the comparator above. Most online comparisons apply the state figure to both regions and quietly understate Madrid's advantage by that amount.
Where the gap really sits.
A five point difference at the top is the number that gets repeated. It is the least useful one, because very few people have a taxable base above 300,000 euro. The gap that matters is in the bands where professional salaries actually fall.
On a normal professional salary, this is a few thousand euro a year.
Real, worth having, and not on its own a reason to move house, change schools and leave a city. Run your own figure in the comparator before deciding what it is worth. The thing that does move the decision for a wealthy household is the next section, and it is not income tax.
Wealth tax: the actual Madrid story.
Madrid relieves the wealth tax in full. Catalonia does not, and sets the lowest exempt threshold in common-regime Spain. That is a far larger difference than anything in the income tax scales — but the Madrid relief no longer works the way it is usually described.
| Madrid | Catalonia | |
|---|---|---|
| Exempt minimum | 700,000 euro | 500,000 euro |
| Main home exemption | Up to 300,000 | Up to 300,000 |
| Regional relief | 100 per cent, but see below | None |
| Regional tariff | Not reached while relieved | 0.21% to 3.48% |
Madrid did not stop relieving the tax. It stopped letting the state collect instead.
The state created a temporary solidarity tax on large fortunes precisely so that regional reliefs would not leave big estates untaxed. Madrid's answer was to make its own relief conditional: while the solidarity tax is in force, the relief is the difference between the regional wealth tax and the state solidarity tax. The practical result for a Madrid resident above the solidarity threshold is that the bill is similar to what the state would have charged — the money simply stays in Madrid. Below that threshold, the Madrid relief still works as advertised.
For a household with a few hundred thousand euro of assets, therefore, Madrid is materially cheaper than Catalonia and the difference dwarfs the income tax gap. For a household well above three million, the two positions are closer than the reputation suggests, because the state tax catches up with both.
And the taxes on moving your money.
- Buying a home. Catalonia's transfer tax became progressive in 2025, from 10 per cent to 13 above 1.5 million euro. Madrid's general rate is markedly lower, which on a single purchase can exceed several years of the income tax difference.
- Inheritance and gifts. Madrid relieves transfers between close family almost entirely. Catalonia gives relief but on a narrower basis. For a family expecting to pass assets down, this is usually the largest number in the whole comparison.
- Deductions you can actually use. Madrid runs a 30 per cent rental deduction for tenants under 35, capped at 1,237.20 euro, a 600 euro birth or adoption deduction for three years, and deductions for school costs. Catalonia's equivalents were widened in 2025 but remain smaller.
How much do I save by moving from Barcelona to Madrid?
Is Madrid's top rate 43 or 45 per cent?
How long must I live there before it counts?
Does any of this apply under the Beckham regime?
What about savings income?
The income tax gap is worth thousands. The wealth tax gap is worth deciding on.
Talk through your position ↗Alexander Baranov
Seventeen years designing and delivering cross-border corporate structures — incorporation, tax, holding, banking and market entry — for founders and companies expanding into Spain and the EU. Author of professional books on entering the Spanish market.
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