Still pay Plusvalia

WHAT IS PLUSVALIA

The Plusvalia is a municipal tax that owners pay at the town hall when selling their real estate. Calculated only on the value of the land, not on the real estate on it. The cadastral value at the time of purchase is the basis for the calculation of the Plusvalia. The cadastral value increases every year. The municipalities themselves can determine 2 of the 4 elements of the calculation. Because of this, the Plusvalia differs per municipality. The seller pays the difference between the current and the initial cadastral value. The actual increase in value is not considered. The longer a property has been in possession, the higher the tax. Those who sell at a loss do not have to pay Plusvalia.

PLUSVALIA DECLARED ILLEGAL

Last week the Constitutional Court declared the "Plusvalia" illegal. Municipalities were no longer allowed to levy the so-called "Plusvalia Municipal". Municipalities were in an uproar because an important source of income was disappearing.

PAY PLUSVALIA AFTER ALL

Monday 8th November the Government announced that municipalities can still collect Plusvalia. But in a different way.

In the future, the vendor can choose from two options.

Option A

Calculation of the amount by multiplying the cadastral value by new coefficients.

Option B

Calculation of the amount by using the real profit. This is the difference between the selling price and the purchaseprice.

If there is no profit, there is no obligation to pay.

The government will determine new coefficients to apply to the cadastral value. Updated every year.

What is also new is that capital gains realized in less than one year are also taxed.

Municipalities will have six months to install the new system.

The new law will take effect when published in the Official State Gazette (BOE).