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Date Published: 05/05/2025

Cash makes a comeback in post-blackout Spain, but the taxman is watching

Keeping cash at home in case of emergency comes with some important tax implications in Spain

The massive power outage that hit Spain last week has reminded many of us of the old adage: Cash is King. With electricity, internet and mobile networks down across the country, card machines were out of action, so anyone who didn’t have money on them couldn’t even buy a litre of milk for the best part of a day. As a result, queues formed around the block from ATMs as panicked consumers scrambled to withdraw some cash.

Spain, like the west of the world, is also increasingly vulnerable to cyber attacks and horror stories abound about people waking up to find their bank accounts completely drained. While the blackout was unprecedented and having your account hacked is unlikely, there’s no arguing that it makes sense to keep some cash handy at home for emergencies.

But as most of us know, Spain’s Tax Agency Hacienda is eagle eyed and keeps a close watch on how much money we’re lodging and withdrawing, so there’s a few things you’ll need to keep in mind.

First off, it’s completely legal to keep an emergency cash fund in your home in Spain and there’s no limit to how much you can squirrel away in your house. However, if you are ever audited, you will quite likely be asked to prove this money came from a legal source and that all corresponding taxes have been paid.

To keep proper tabs on what we’re doing with our money, the Tax Office has imposed new rules on banks, some of which have only come into force this year. For starters, if you need to withdraw or lodge more than €1,000, you’ll have to go to a desk rather than using the ATM. And if that amount exceeds €3,000, the bank is obliged to notify the Tax Agency, which could trigger an audit.

But it’s not just large sums of money that are in the spotlight; frequent withdrawals of deposits of smaller amounts, such as €600 or €700, can also raise alarm bells if they’re occurring regularly.

Furthermore, regardless of the total amount, if you’re dealing in €500 bills, the bank also has to let the Tax Office know.

The bottom line is that it’s up you how much cash you want to keep at home as an emergency stash, and provided your house is secure, it can never be a bad thing to have money at hand. In fact, the EU even recommends that we keep a 3-day survival kit at home, which includes some cash.

However, although your money is your private affair, the ever-watchful Tax Office will still be keeping close tabs, and if you can’t prove where that cash came from, you could be looking at a sizeable fine.

In other news: Catalonia delays doubling its tourist tax until after summer

Image: Pexels

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