What is the plusvalía municipal tax when selling a property in Spain?

A local tax on the land, not on your profit

Spanish town halls levy a tax every time urban land changes hands. Its full name is the impuesto sobre el incremento del valor de los terrenos de naturaleza urbana (IIVTNU), but everyone calls it the plusvalía municipal. It looks only at the land component of the property, not the building, and it is collected by the town hall or the provincial collection body, not by the Agencia Tributaria.

When you sell, the seller pays it. It is a different tax from the 19 % non-resident capital gains tax on Modelo 210, so a sale normally triggers both.

Two ways of calculating it

Since the 2021 reform, the town hall offers two methods and the seller can rely on the one that gives the lower result:

• the objective method, based on the cadastral value of the land and coefficients set by the municipality for the number of years owned;
• the real method, based on the actual difference between the land value on purchase and on sale, as shown by the deeds.

Each town sets its own rate and coefficients within national limits, so two similar flats in neighbouring towns can pay quite different amounts. Ask the town hall or your lawyer for the figure before signing.

No gain, no plusvalía

The same reform confirmed that if the property was sold for less than it was bought (comparing the deeds), there is no taxable increase and no plusvalía to pay. You must be able to prove it, so keep your purchase and sale deeds and declare the absence of gain within the town's deadline.

How it fits with the other sale taxes

On a typical non-resident sale you deal with:

1. the 3 % retention withheld by the buyer (explained here);
2. your Modelo 210 on the gain, at 19 %, settling or reclaiming the retention;
3. the plusvalía municipal, paid to the town;
4. the imputed income for the months before the sale, filed the following year.

Buyers' lawyers sometimes ask to hold back part of the price to cover the plusvalía; agree this in the contract. For the national tax, see capital gains tax on a sale and our guide to the plusvalía municipal.