The municipal plusvalía (IIVTNU) when you sell a property in Spain

Owners selling a Spanish home usually know about the tax on the capital gain and the 3% the buyer withholds. Fewer expect a second bill from the town hall a few weeks later. This is the plusvalía municipal, officially the Impuesto sobre el Incremento de Valor de los Terrenos de Naturaleza Urbana (IIVTNU). It is a local tax, it follows its own rules and it has nothing to do with your Modelo 210.

This guide explains what the plusvalía taxes, how it is calculated since the 2021 reform, who pays it and how to handle it from abroad.

What the plusvalía taxes

Despite its name, the plusvalía does not tax the profit on your home. It taxes the increase in value of the land on which the property stands, over the years you owned it. For a flat, that is your share of the land under the building. The tax is set and collected by the municipality where the property is located, which is why rates and procedures differ from one town to the next.

Who pays

Transfer	Who pays the plusvalía
Sale	The seller
Inheritance	Generally the heir
Gift	Generally the person receiving the property

In a sale, the law places the tax on the seller. Some contracts shift it to the buyer by agreement, especially for new builds, but that is a private arrangement; the town hall still looks to the legal taxpayer. Read the purchase contract carefully before signing.

When the seller is a non-resident, buyers and notaries often keep back an amount at completion to cover it, alongside the 3% withheld for the State. Agree in writing who will file and pay, and what happens to any surplus.

How it is calculated since 2021

Until 2021, the calculation assumed that land always gained value, even when owners sold at a loss. After rulings by Spain's Constitutional Court, the law was reformed. Today:

No gain, no tax

If you can show, with the purchase and sale deeds, that the land did not increase in value, typically because you sold for less than you paid, there is no plusvalía to pay. You still have to declare the transfer and provide the evidence.

Two methods, and the lower result applies

When there is a gain, the town hall offers two ways of calculating the base:

• The objective method: the cadastral value of the land at the time of sale, multiplied by a coefficient that depends on the number of years you owned the property. Each municipality applies coefficients within limits set by law and reviewed periodically.
• The real method: the actual gain between purchase and sale, broadly the difference between the two prices attributed to the land in the same proportion as the land represents in the cadastral value.

You can ask for the method that gives the lower amount. The municipal tax rate is then applied to the base. Rates vary between towns, which is why two similar sales on the same coast can produce different bills.

A simplified illustration

A non-resident sells a flat for €210,000 that she bought for €150,000. The total increase is €60,000. On her IBI receipt, the land accounts for 40% of the cadastral value. Under the real method, the land gain is broadly €60,000 × 40% = €24,000, and the municipal rate is applied to that figure. Under the objective method, the base depends on the land's cadastral value and her years of ownership. The town hall, or a professional, compares both. Had she sold for €140,000, there would be no gain and no plusvalía.

How to deal with it from abroad

1. Before the sale, ask the town hall or its collection agency how the plusvalía is declared and how quickly; deadlines are short.
2. Gather the deeds of purchase and sale, the latest IBI receipt and proof of improvement costs if relevant.
3. Decide who files: the notary, your lawyer, a gestor or the buyer's side, under a written agreement.
4. File and pay, choosing the more favourable method where the town hall allows it, or attaching proof that there was no gain.
5. Keep the receipt: it is generally treated as a cost of the sale when the gain on Modelo 210 is calculated.

Many municipalities use provincial collection agencies (SUMA in Alicante, for example). The IBI guide lists the main ones.

How it fits with the State taxes

A sale by a non-resident involves three separate things:

• the 3% withholding by the buyer, paid on Modelo 211 within a month of the sale;
• the capital gains tax at 19% on the gain, declared by the seller on Modelo 210 within the three months after that month, with a refund if the 3% exceeds the tax;
• the municipal plusvalía, paid to the town hall.

Our guide to selling as a non-resident covers the first two in detail, and the capital gain tool gives an estimate of the State tax.

FAQ

I sold at a loss. Do I really have to do anything?

Yes, you must still declare the transfer to the town hall, but you can prove with the deeds that there was no increase in value. In that case no plusvalía is due.

Can the buyer pay it instead of me?

Only by private agreement. The seller remains the legal taxpayer, so make sure the agreement is written and that payment is actually made.

Is the plusvalía the same as the capital gains tax?

No. The plusvalía is a municipal tax on land value. The capital gains tax is a State tax on your overall profit, declared on Modelo 210. You may owe both.

I inherited the property. Who pays the plusvalía?

Generally the heir, on the land value gained during the deceased's ownership. See what to declare after inheriting.