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Comment by dmoy | Hacker News Reader

> For example in some parts of Spain the wealth tax is high enough that it would be impossible to live off investments as the safe withdrawal rate is so low that you would need millions to fund a modest income.

What are the numbers there? I heard of the wealth tax above €3 million, but is there more?

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The €3 million one is a new "temporary" tax since this year from the central goverment. "Impuesto al patrimonio" has existed for long and it depends on where in Spain you live. It's not applied in the region of Madrid, and the it kicks from a net worth of €400k in Aragón. In all regions your main residence is exempted.

For a net worth of €4m, you'll pay €60k in Aragón to €22k in Vizcaya to €0 in Madrid.

So like 1.5%? With US&International based investment returns that means like 40% more money is needed above what's normally required, or say 23 years instead of 19 years of investing.

So that hurts the whole FI/RE thing, but doesn't sound like it would be the primary blocker.

See https://news.ycombinator.com/item?id=36777125 for a breakdown of what it would look like with an example portfolio in Valencia. The tax differs by region and is highly progressive. For a 2M portfolio in Valencia it ends up cutting 0.7% off your safe withdrawal rate after exemptions if you split it between a married couple. It makes it harder to retire early, but don't forget about additional US costs like health insurance, vehicle, etc.

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