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What is plusvalía tax

“Municipal plusvalía” is the name given to the “Tax on the Increase in Value of Urban Nature Land,” also known as IIVTNU.

This municipal tax taxes the increase in value of urban nature land at the time of its transmission.

It is important to note that this tax arises with the transmission of the land, regardless of whether there are buildings on it or not. Therefore, when it comes to the transmission of a house, what is taxed is the transmission of the land on which it is built and not the building itself.

When is plusvalía municipal tax paid?

The transmissions that give rise to municipal plusvalía are the sale of a property, its donation, legacy, or inheritance.

The municipal plusvalía must be paid within the following periods, counted from the date of the transmission:

  • In the case of the sale of a property or donation, the period will be 30 working days from the date of sale or donation.
  • If it is an inheritance, the deadline for presenting the municipal plusvalía is 6 months from the date of death, extendable up to one year.

Who should pay the plusvalía tax?

In the most common case, the sale, it is the seller of the property who must pay the municipal plusvalía.

In the case of donations, it is the donee, that is, the person who receives the donation, who must pay the plusvalía.

On the other hand, in the case of inheritances, it is the heirs who must pay this municipal tax.

Inheritance Plusvalía 2024: Who Should Pay It?

It’s important to keep in mind that if the heir sells the urban property, they will have to pay the municipal plusvalía tax twice:

  • Once as an heir
  • Again as a seller

Previously, under the previous legislation, if the property was sold within one year of inheriting it, the tax was not paid.

However, with the new regulation following the Constitutional Court’s ruling in October 2021 declaring the calculation system of the plusvalía tax unconstitutional, capital gains generated in less than a year will be taxed.

What happens when there are multiple heirs? How is this tax paid?

When there are multiple heirs in an inheritance, the plusvalía tax can be paid by a single person, covering the entire amount to be paid, or each heir can pay their corresponding part of the tax based on the percentage assigned to them in the distribution of the inheritance.

How to calculate municipal capital gains tax in Spain 2024

The municipal capital gains tax is a tax that levies the increase in value experienced by urban land at the time of its transmission.

Since its last update in November 2021, there are two methods for calculating this tax that will be applied in 2024.

Capital gains tax by Real Calculation Method

The real method is the first of the two methods for calculating municipal capital gains tax in 2024. It is used to calculate the taxable base of this tax.

To do this, the acquisition value (purchase price or declared value in inheritance tax) is subtracted from the transmission value (sale price). The result obtained is multiplied by the percentage of the cadastral value of the land.

This calculation method is applied when you want to know the difference between the price at which a property was purchased and sold. From that capital gain amount, the taxable base will be taxed.

Capital gains tax by Objective Calculation Method

The second calculation method is the objective method. It is used to calculate municipal capital gains tax when information on the acquisition value of the property is not available.

In this case, the cadastral value of the land at the time of sale is multiplied by a coefficient determined by each municipality and depending on how long a property has been owned.

This method is related to objective capital gains tax. To calculate it, the years that have elapsed since the acquisition of the property until the transmission are taken into account.

Based on that number of years, a table of values must be consulted that will be updated every year by the Ministry of Finance. It is called the table of multiplier coefficients.

Calculation of Inheritance Tax in Mijas (Malaga): Practical Example 2024

In this article, I will explain to you how to calculate the inheritance tax in Mijas (Malaga) in a practical and simple way.

If you need to calculate the tax you have to pay for inheriting a property in this locality, this article is for you.

Practical example of calculation of inheritance tax in Mijas

Let’s imagine that Diego’s grandparents bought a house in Mijas in 2012 for 190,000 euros, and Diego’s parents inherited it in 2021 with a value of 285,000 euros. Additionally, we know that the cadastral value of the land according to the IBI is 56,000 euros, and the total cadastral value of the house is 98,000 euros.

Data necessary for the calculation of the inheritance tax

To calculate the inheritance tax in Mijas, we need the following data:

  • Land value (IBI): 56,000 euros
  • Total value (IBI): 98,000 euros
  • Complete years elapsed: 9 years
  • Applicable coefficient for 9 years: 0.09
  • Tax rate in Mijas in 2021: 30% (the rate has not yet been fixed by the municipalities, so the maximum rate applies)

Objective calculation method

To calculate the inheritance tax, we can use the “objective” calculation method. In this case, the taxable base is obtained by multiplying the land value by the applicable coefficient for the complete elapsed years.

Taxable Base: 56,000 euros x 0.09 = 5,040 euros
Tax rate: 30%

To pay: 5,040 euros x 30% = 1,512.00 euros

Real calculation method

We can also use the “real” calculation method. In this case, the taxable base is obtained by subtracting the acquisition value (the purchase made by Diego’s grandparents) from the transmission value (the inheritance).

Then, the percentage of the land value over the total value of the house is calculated, and it is multiplied by the obtained taxable base.

Difference between acquisition and transmission value: 95,000 euros % of the land value over the total value of the house: 60%

  • Taxable Base: 95,000 euros x 60% = 57,000 euros
  • Tax rate: 30%
  • To pay: 57,000 euros x 30% = 17,100.00 euros

Which calculation method to choose?

In this example, Diego’s parents could be taxed based on the taxable base obtained using the “objective” method (1,512 euros), instead of the one obtained using the “real” calculation method (17,100 euros), since in the first case, applying the tax rate, they would pay 1,512.00 euros, and in the second case, 17,100 euros, so there is a significant difference.

Remember that each case is unique, and it is important to have the advice of an expert in tax matters to determine which is the most suitable calculation method in your particular case.

This way, you can calculate the inheritance tax in Mijas accurately and avoid possible errors or penalties.

Is it mandatory to pay the capital gains tax? How can I avoid paying it?

How to avoid paying capital gains tax on inheritances

The capital gains tax is a tax that levies the increase in the value of a property during the time in which the owner has owned it.

In the case of inheritances, the heir may find themselves obliged to pay this tax, which can generate a significant economic burden.

However, there are certain circumstances in which the payment of capital gains tax on inheritances may be exempt.

Exemption for rustic land

Firstly, it should be noted that if the inherited property is rustic land, the heir may be exempt from paying capital gains tax.

In this case, it is important to have specialized legal advice to be able to demonstrate that it is this type of land and thus avoid paying the tax.

Exemption for property value loss

Another situation in which one may be exempt from paying capital gains tax on inheritances is when the value of the inherited property has decreased since its acquisition.

The new regulation, contained in Royal Decree 26/2021, recognizes the exemption from the tax in these cases, following the latest ruling by the Constitutional Court.

However, it is important to demonstrate to the municipality that the property has lost value, which can be complicated if one does not have the appropriate legal advice.

Are you going to sell your property in Mijas?

Our law firm in Mijas can help you with the entire buying and selling process of the property and advise you to always find the best option.

If you are thinking of selling your property in Mijas, our real estate agents can assess your property and put it up for sale to achieve the best market price.

1 Comment

  1. sheila kelder-croll says:

    Dear sirs, in 2002 I bought bonita hills 31 in mijas ( Sitio de Calahonda in one package ( parking place in garage and apartment ) two weeks ago I sold this package ( apartment and parking place ) with loss ‘ in 2002 € 231.000 excl. cost, in Total € 253000 and tax , now € 24000,00. Thé ayuntamiento tells me that they need two separate amounts for parking place and apartment in 2002, There are two different cadasteral numbers. How can I obtain the value of apartment and parkingplace separetly from 20002? If I do not give these figures the ayuntamiento Will charge me.

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