The plusvalía is the municipal tax on the increase in value of urban land. The town council charges it when an urban property is transferred (by sale, inheritance or gift) or when a right of enjoyment over it, such as a usufruct, is created or transferred (Article 104 of the Local Finance Act). It taxes the increase in value of the land, not of the building, and each town council regulates it in its tax bylaw within the limits of the law.
In brief
- On a sale the seller pays; on an inheritance or gift, the person who receives the property.
- If the value of the land has not increased, the tax is not due, but this must be proved.
- It is calculated on the cadastral value of the land or on the actual gain, and the lower figure applies.
- Each town council sets the rate, up to a maximum of 30%.
- Deadline: 30 working days for sales and gifts; six months, extendable to one year, for inheritances.
Who pays
Under Article 106:
- On a sale or other transfer for consideration, the seller or transferor.
- On an inheritance or gift, the heir, legatee or recipient of the gift who receives the property.
- If the seller is an individual not resident in Spain, the buyer pays instead, as a substitute for the taxpayer.
When it is not due
- If there is no increase in value. There is no tax if the value of the land on sale is equal to or lower than on purchase. The values stated in the purchase and sale deeds (or the value verified by the authorities, if higher) are compared, without counting expenses or taxes, and for a property with a building only the land share is taken, according to the proportion of the cadastral value. You must declare the transfer and provide both deeds (Article 104.5).
- In separations and divorces. Transfers of property between spouses or to the children in compliance with judgments of annulment, separation or divorce are not taxed, nor are contributions to and allocations from the marital estate (Article 104.3).
- Rural land. Only land classed as urban for property tax (IBI) purposes is taxed (Article 104.2).
How it is calculated
The tax base is the increase in value of the land over a maximum of twenty years (Article 107):
- Objective method: cadastral value of the land at the time of the transfer multiplied by a coefficient based on the years the property has been owned. Each town council approves its coefficients without exceeding the maximums set by law, which are updated every year.
- Actual gain: if the taxpayer proves that the actual gain on the land is lower than the result of the objective method, that actual gain is taken as the base (Article 107.5).
The rate set by the town council is applied to the base, up to a maximum of 30% (Article 108). Bylaws may provide for relief of up to 95% on inheritances in favour of descendants, spouses and ascendants. Whether it exists and at what percentage depends on the municipality.
Deadlines for declaring it
From the date of the transfer (Article 110):
- Sales, gifts and other transfers between living persons: 30 working days.
- Inheritances: six months, extendable up to one year if the taxpayer requests it.
If the town council has established self-assessment, the taxpayer calculates and pays the tax within the same deadlines. On a sale, the buyer must also notify the town council of the transaction, and on a gift, the donor.
How we help you
We compare both methods so that you pay as little as the law allows, prove the absence of a gain when you sell for less than you paid, file the return or self-assessment and appeal assessments that are not correct. We work with town councils all over Spain, in Barcelona or by video call. You can book your first consultation or see our service for plusvalía (municipal capital gains tax).
Legislation
- Royal Legislative Decree 2/2004, of 5 March, consolidated text of the Local Finance Act (Articles 104 to 110), as amended by Royal Decree-law 26/2021, of 8 November.
- Tax bylaw of the town council where the property is located.
This article is for information only and is not a substitute for advice on your specific case.