When you decide to sell a property, it is important to know all the costs associated with the transaction. One of the most relevant, and often unknown, is the capital gain municipal. Understand what it is, how it is calculated and when you have to pay it can help you to better plan the sale and avoid surprises.
What you need to know when selling your home
Municipal capital gains tax, the official name of which is Tax on the Increase in the Value of Urban Land (IIVTNU), The tax is levied on the increase in value of the land of your property from the time you bought it until the time you sell it.
It is important to note that this tax is not calculated on the total sale price of the property., but only on the value of the land (not the building). This value is determined by the respective municipality on the basis of the cadastral value of the land.
Since the last legal reforms in Spain, there are two methods of calculation:
- Target systembased on coefficients established by the municipality according to the number of years of ownership of the property.
- Actual systemis applied when you can demonstrate that the gain obtained is less than the estimated gain of the target system.
In addition, there are situations in which you will not have to pay capital gains, for example, if you sell the property at a loss or if there has been no real increase in the value of the land.
Another key point: the deadline for payment of this tax is usually 30 working days from the signing of the sale and purchase agreement (although this may vary depending on the municipality).
How to pay a capital gain
The process of paying the capital gains tax is relatively straightforward, but requires attention to deadlines and documentation.
- Request tax calculation. You can do this directly at the town hall where the property is located or through its electronic office. In some cases, the notary can provide you with initial information.
- Submit the necessary documentation. Generally you will need:
- Current deed of sale.
- Deed of prior acquisition.
- IBI receipt.
- ID of the seller.
- Choosing the most favourable calculation method. If the actual increase is less than the estimated increase, you can opt for the method that means you pay less.
- Make payment. Once the amount has been calculated, you can pay it at the collaborating entities or online.
- Save the receipt. It is essential to keep the proof of payment in case it is needed for future transactions.
In many cases, having professional advice can facilitate this process and ensure that everything is done correctly.
At Immosol We know that selling a property involves making important decisions. That's why we accompany our clients every step of the way, making sure they have all the information they need for a safe, transparent and smooth transaction.
