Spain is preparing for another tax shake-up for property owners. The Cabinet has announced plans to revise the multipliers used to calculate the municipal tax on the increase in value of urban land—the tax paid when selling, gifting, or inheriting property. If approved by parliament, the new rules will take effect as early as 2026 and will impact nearly everyone planning real estate transactions.
The main intrigue is that for those who sell an apartment or house less than 15 years after purchasing it, the tax burden will increase significantly. In some cases, the amount could rise by almost 40%. However, for owners who have held onto their property for more than 17 years, the coefficients will be reduced—by up to 12.5%. The government is clearly aiming to curb speculation and rapid property flipping.
New coefficients
The changes affect the so-called ‘objective method’ of calculating the tax, which was proposed by the socialists (PSOE) this spring. Other measures were also discussed at the time: raising VAT on tourist apartments to 21%, tightening tax rules for investment real estate funds (socimis), and introducing extra fees for vacant homes. All these initiatives are aimed at making the housing market more transparent and fair.
Since the national budget for 2026 has not yet been approved, the government has decided to act through a special royal decree. The document has already been published in the official bulletin (BOE) and now awaits approval from parliament. If lawmakers give the green light, the new rates will apply to all transactions made after the law comes into effect.
Who will be affected by the changes
The government is paying special attention to those who sell property within the first 15 years of ownership. For these cases, the rates will increase, most notably for sales between 9 and 12 years after purchase. This measure aims to curb speculative activity by those who buy and quickly resell homes for fast profits. However, if a flat or house has been owned for more than 17 years, the tax rate will actually go down.
Legal experts advise closely monitoring the fate of the new decree. If the document is not approved within 30 days, as required by the Constitution, all changes will be automatically annulled, and the tax will once again be calculated according to the previous regulations. A similar situation happened last year, when a comparable decree failed to pass a vote and remained only on paper.
Practical advice
Tax law experts recommend not rushing to sell if you fall under the higher coefficients. It’s better to wait for the final decision of parliament—this could help you save a significant amount. On the other hand, those who have owned property for more than 17 years and are planning to transfer it through inheritance or as a gift should act quickly: if the law comes into force, their tax burden will decrease.
However, even if the new rules are implemented, municipalities will still have the option to lower the cadastral value of land by up to 15%. This will help ease the tax burden in cities where property values haven’t been revised in a long time.
Why the tax is being updated
The reason for annual changes is a 2021 Constitutional Court ruling, which found the previous system unfair. Previously, tax was charged even when the owner sold property at a loss. Now, coefficients must be updated every year to reflect actual market trends and prevent overpayments.
The law also gives municipalities the right to independently lower the tax base if the cadastral value of land does not match the market value. This is especially relevant for smaller towns and villages where real estate prices hardly change over the years.
If you weren’t aware, PSOE is the Spanish Socialist Workers’ Party, one of the country’s oldest and largest political forces. In recent years, it has been the driving force behind most property tax reforms. The party actively advocates for stricter housing market regulation, tackling empty apartments, and curbing speculation. Its ranks include many experts in economics and law, enabling the development of complex and well-thought-out legislative initiatives.
