The municipal capital gainsCapital gains (plusvalía patrimonial) refer to the actual profit made when selling a property, calculated by subtracting the original purchase price (plus associated costs) from the sale price. For ex... More tax, officially known as the Impuesto sobre el Incremento de Valor de los Terrenos de Naturaleza Urbana (IIVTNU), is a tax levied by the local council when an urban property is sold.
This tax is charged on the increase in the land’s value (not the building itself, whose value increase is calculated through the standard capital gainsCapital gains (plusvalía patrimonial) refer to the actual profit made when selling a property, calculated by subtracting the original purchase price (plus associated costs) from the sale price. For ex... More tax), from the time it was acquired until it is sold.
In a property sale, the seller is usually responsible for paying the plusvalía municipal. The calculation is made by applying a coefficient to the cadastral valueThe cadastral value of a property is the administrative valuation assigned by the Land Registry (Catastro) to every property in Spain. It is often lower than the market value, as it is primarily used ... More of the land, based on how long it has been owned (years of tenure).
