Spain is gearing up for one of its most anticipated events, the 2024 Christmas Lottery, set to take place on December 22. Known as 'El Gordo,' this extraordinary lottery has not only captured the imagination of millions across the nation but has also brought with it important discussions surrounding taxation on the winnings.
The lottery this year continues with its established structure, where winnings up to €40,000 remain tax-exempt. This has been the case since 2020, when the exemption threshold was raised from €20,000 to its current level. Any amounts beyond the €40,000 ceiling incur a 20% tax rate. For example, winning the top prize of €400,000 entails taxation only on €360,000, leaving the winner with around €328,000 after taxes are accounted for, with the tax office receiving about €72,000.
According to reports from Hacienda, the only prizes subject to taxation are the three largest ones. Prizes beneath this threshold—including the fourth and fifth prizes—are exempt from tax. Participants often wonder about aggregations of smaller winnings exceeding €40,000. The good news for those fortunate enough to win multiple lower prizes is clear: since the smaller winnings are taxed separately, if they don't individually surpass €40,000, there’s no tax to pay.
Tax collection occurs immediately upon claiming the prize, which can be surprising for many winners. Rather than waiting until the annual income declaration, lottery winners receive their winnings less the tax amount right when they cash their tickets. This system allows Hacienda to streamline its collection process and ensures public revenue even before the money finds its way to the winners' wallets.
The 2024 Christmas Lottery promises to be particularly lucrative, with total prizes amounting to €2.7 billion, reflecting an increase from the previous year's total. This year, organizers have designated eight additional series of tickets, bringing the total to 193—an increase not only enhances the excitement but also the pool of prizes distributed among participants.
Traditionally, cities and regions across Spain prepare for this lottery significantly, with locals often purchasing their tickets weeks or even months prior to the draw. Average spending per person is on the rise, with estimates indicating individuals will spend approximately €73.84 on lottery tickets. The Basque Country leads the pack, with average spending exceeding €84 per person.
Participation levels continue to reflect trust and enthusiasm for the lottery, with experts noting this year's sales resemble last year's, albeit slightly higher. Jesús Huerta, president of the State Lottery and Betting Society (LAE), emphasized, “Sales trends are similar to last year, if not somewhat up.” He noted the excitement around the lottery with the slogan 'La Lotería, una gran tradición' underscoring its significance as part of Spanish culture.
The lottery has now become more than mere chance for many. For example, surveys indicate around 30% of players express intentions to invest winnings, particularly the Gordo prize, which awards €400,000 for each winning ticket, something not lost on hopefuls eyeing property purchases or other life changes.
Regarding accessibility, the lottery continues to innovate. Players can now also utilize platforms like Bizum for quick transactions, particularly for prizes below €2,000. Winners of larger amounts are directed to designated banks such as BBVA and CaixaBank to claim their winnings.
The excitement leading up to the December 22 draw crescendos as communities unite around this shared experience. Online platforms like CANARIAS7 and RTVE will broadcast minute-to-minute updates and results, ensuring everyone can partake, whether they have skin in the game or are simply curious about the outcomes.
Spaniards approach lottery ticket selection with varying degrees of seriousness; for some, it's about numbers packed with personal significance such as anniversaries or birthdays, for others it's about just trying their luck. Regardless of the method or thought process behind choosing numbers, participants share the collective hope of a life-changing event.
Every year, El Gordo embodies not just the opportunity for incredible wealth but also reflects broader societal values, as the money is often seen as fuel for dreams, investments, or simply enjoying life. It encapsulates the spirit of hope and togetherness found within Spanish culture.
With the lottery drawing near, anticipation builds, and for many, spending entails more than just monetary investment; it is about tradition, unity, and the continuous prospect of fortune. While taxes may temper the excitement for some, the thrill of participating and the mere possibility of winning remains undeniably exhilarating across Spain each December.