Plusvalía Municipal in Barcelona: what it is and how it is calculated

Maybe you’re thinking about selling a property or you’ve just inherited one or more real estate assets. In that case, one of the aspects you need to consider is the taxes that may apply.

One of the least known taxes when transferring a property is the Tax on the Increase in Value of Urban Land, commonly known in Spain as the Plusvalía Municipal.

If you haven’t heard of it or don’t know how it works, don’t worry. At ShBarcelona, we’ve prepared a detailed guide on this tax in Barcelona so you have all the information you need.

What is the Plusvalía Municipal?

The Plusvalía Municipal is the Tax on the Increase in Value of Urban Land (IIVTNU), which is collected by the local city council where the property is transferred.

This tax applies to the increase in the value of a property due to the gain obtained from the moment it was purchased or acquired until its sale or transfer.

In the case of selling a property, the municipal capital gains tax applies to the land on which the building is constructed, not the building itself. In Barcelona, the current tax rate for the IIVTNU is 30%.

What if there is no increase in value?

If the land has not increased in value, you do not have to pay the Plusvalía Municipal However, you must inform the Barcelona City Council of the transfer and submit the deeds or documents proving that there has been no increase in value.

How is the Plusvalía Municipal calculated?

There are two calculation methods for this tax. The taxpayer can choose the one that is most favorable by estimating the amount to be paid:

Objective Method

This method multiplies the cadastral value of the land by the legal coefficient in force that year, based on the time elapsed between the acquisition and transfer.

• Formula: Taxable base × 30% (tax rate)
• Taxable base: Cadastral value of the land × coefficient assigned to the period of value increase

Real Value Increase Method

This method is based on direct estimation. It applies the percentage of the cadastral value of the land at the time of transfer to both the purchase and sale values, then calculates the difference between them.

• Formula: Taxable base × 30% (tax rate)
• Taxable base: (Sale price × land value percentage) – (Purchase price × land value percentage)

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Who pays the Plusvalía Municipal?

The seller or transferor of the property is responsible for paying the tax, as it is based on the increase in land value during their ownership.

• In inheritance or donation cases, the new owner must pay the tax. However, if the inherited property is sold within 12 months, the tax does not have to be paid.
• If the seller is a non-resident in Spain, the buyer is responsible for paying the tax.

How is the Plusvalía Municipal paid?

The Barcelona City Council offers three ways to process the tax payment:

• Online
• By phone: 010 (free) or 931 537 010 (if calling from outside the metropolitan area)
• In person: By appointment at the Municipal Tax Institute (IMH)

What are the deadlines?

The deadlines for payment depend on the type of property transfer:

• For sales: 30 business days from the transfer date.
• For inheritances: 6 months from the date of death (extendable to 1 year if requested within the first 6 months).
• For judicial inheritance processes: The deadline restarts after the final court resolution.

Are there any tax benefits?

Yes, the Barcelona City Council offers a 95% tax reduction in these cases:

Inheritance of a primary residence

• • The property cannot be sold within 3 years after the owner’s death (except in case of the new owner’s passing).
  • Eligible beneficiaries include spouses, children, adopted children, parents, adoptive parents, or those who lived with the deceased for at least 2 years.
  • Also applies to siblings, partners, or individuals with at least 65% disability (up to the third degree of kinship).

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Inheritance of a business property

• The business activity must continue for at least 5 years after the owner’s death (unless the new owner passes away).
• Eligible beneficiaries include spouses, children, adopted children, parents, adoptive parents, and long-term partners.

⚠️ If the conditions are not met, the tax benefits will be revoked, and the full tax amount plus late fees must be paid.

Can I deduct the Plusvalía Municipal on my income tax return?

Yes, you can deduct the municipal capital gains tax on your income tax return (IRPF) in the year of the sale.

For example, if you sell a property in December 2023 and pay the tax in 2024, you must declare it in your 2023 income tax return.

ShBarcelona, your trusted real estate agency

Now you have ShBarcelona’s complete guide on the municipal capital gains tax. We hope you find it useful! If you have any questions, feel free to reach out—we’ll be happy to help you.

*Cover photo: Kaspars Upmanis via Unsplash