Taxation Features When Changing Property Ownership
When urban real estate in Spain is sold or inherited, there is an obligation to pay a tax on the increase in land value. This levy, known as the municipal capital gains tax, is regulated at the local government level. The amount of payment depends on several factors that determine the final sum.
Key Parameters for Calculation
The first important factor is the cadastral value of the land on which the property is located. This figure is set by the state cadastre and can be found on property tax bills or accessed through online services. The second factor is the duration of ownership. Municipalities use special coefficients that depend on the number of years since the property was acquired or inherited. Each time period has its own multiplier, but the maximum term for calculation is limited to twenty years. After this period, the last established coefficient is used.
Interest Rate and Final Amount
After determining the tax base, formed by the cadastral value and the applicable coefficient, the interest rate is added. Each municipality sets its own rate, but by law it cannot exceed 30%. The final amount payable is calculated by applying this rate to the calculated base.
Methods for calculating the tax base
There are two methods for calculating the tax base. The first is the actual method, where the difference between the purchase and sale price is multiplied by the land’s cadastral value share. The second is the objective method, where the cadastral value of the plot is multiplied by a coefficient set by the municipality, taking into account the ownership period.
Calculation example for Madrid
For illustration, consider an apartment in Madrid where the cadastral value of the land is €250,000. If the applied coefficient is 0.16, the tax base will be €40,000. With a rate of 29%, the tax amount will be €11,600. Therefore, when selling such a property, the owner must pay this amount to the municipal budget.
Specifics for inheritance
In the case of inheritance, the calculation is based on the period from when the previous owner acquired the property to its transfer to the heir. If the property is subsequently sold, the period from the inheritance to the sale is considered. This helps determine the land value increase over the entire ownership period.
Coefficient changes in 2025
In 2025, new maximum coefficient values approved at the national level will be in effect. Municipalities may use lower values if already applied or must reduce them if current rates exceed the established limits. Additionally, local authorities may lower the cadastral land value by up to 15% depending on the data’s accuracy.
