Municipal Capital Gain: What Is It And How Much Do I Have To Pay?

Any property increases in value over the years: this concept is known as capital gain and it is a tax managed by the municipalities . Stay in this article, we will help you clarify what it is about and how much you have to pay.

What is the municipal capital gain?

In Spain, real estate is constantly revalued . The capital gain, also known as the Tax on the Increase in the Value of Urban Land, is granted when there is a transfer of ownership of a land . It can be by inheritance, sale, donation, sale, exchange, among others.

For example, María acquired a piece of land a few years ago with a value of 80,000 euros and now she intends to sell it at a value of 140,000 euros. Specifically, this property rose to a capital gain of 60,000 euros .

In this tax the taxpayers are:

  • When there is a free transfer , either gift or donation, the tax must be borne by whoever obtains the land, that is, the acquirer .
  • If in the middle of the exchange there is money or another element of value , who deferred the property, that is, the transferor .

How is it calculated?

To calculate the municipal capital gain, these aspects must be taken into account:

  • The value of the land at the time the transfer was made. It can be consulted in the receipt of Real Estate Tax (IBI), which is calculated with the cadastral value of a home.
  • The years that have elapsed since the property was acquired, that is, the period of time .
  • The tax rate , which will be established by each council and must not exceed more than 30%.

How to do the tax settlement?

The tax must be paid to the town hall and the taxpayer involved must go, together with the documents that originate the capital gain.

In the case of sale or donation, payment must be made within 30 business days from the date on which the transfer is made. When the occasion is due to death, the term will be 6 months with the possibility of an extension of one year.

There are specific situations in which this tax is exempt , for example:

  • The contributions of assets and rights to conduct spouses benefit of the matrimonial regime: community property.
  • When there is liquidation of the matrimonial property regime .
  • Transfers made when there is mortgage debt .
  • Transmissions of real estate that are in areas determined as historical-artistic heritage .
  • When the transmission is made between spouses in favor of their children.

We hope that this information on municipal capital gains will be of great help to you; Valuing a home and knowing the type of tax that applies is extremely important in the real estate field.

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