- What: a town-hall tax on the increase in the value of urban land when property is sold, inherited or given.
- Who pays: the seller on a sale, but the buyer if the seller is non-resident.
- How much: up to 30% of the taxable gain; the seller can use a formula or the real gain, whichever gives less.
- No gain, no tax: if the land did not rise in value, nothing is due, but you have to prove it.
- Deadline: 30 working days after a sale; six months after a death.
What plusvalía is
"Plusvalía" is short for plusvalía municipal. Its full name is Impuesto sobre el Incremento de Valor de los Terrenos de Naturaleza Urbana (IIVTNU). It taxes the rise in value of the land under a building, not the building itself, over the time you owned it. It is set by each town hall within limits in national law, so the bill for similar homes can differ a lot between towns.
It is different from capital gains tax, which the state charges on your overall profit. On a sale you usually face both. See our overview of property taxes in Spain.
The 2021 reform
For years, plusvalía was charged even when owners sold at a loss. In October 2021 Spain's Constitutional Court struck down the old formula. The government replaced it with Real Decreto-ley 26/2021, in force from 10 November 2021. It made three big changes:
- no tax if there is no gain in land value;
- a choice between two calculation methods;
- new maximum coefficients linked to the years of ownership, including a rate for sales within a year.
The two calculation methods
1. The objective method
The taxable base is the cadastral value of the land at the time of sale (shown on the IBI bill, split between land and building) × a coefficient for the years owned. The town hall sets the coefficient, up to a national maximum that is meant to be updated each year. The tax is that base × the town's rate, which can be up to 30%.
The national maximums have been hard to update. Coefficients approved for 2025 and 2026 by decree were rejected by the Congreso, so, as of this update, the maximums set for 2024 still apply. Your town hall's own ordinance may use lower figures. Check the current coefficients with the town hall.
2. The real-gain method
The taxable base is the actual gain: the sale price minus the purchase price, as stated in the deeds (or the declared values for an inheritance or gift). Only the land share counts. It is worked out using the ratio of land to total value in the cadastral value. The same tax rate then applies.
You can ask for the real-gain method if it gives a lower figure. The town hall compares the two and charges the lower.
No gain: the exemption
If the sale price is not higher than the purchase price, there is no increase and no tax. You must declare it and provide the deeds. Costs such as notary fees and taxes are not added to the prices for this test.
Who pays
- Sale: the seller.
- Inheritance: the heir.
- Gift: the person receiving the gift.
There is an exemption for certain cases. These include transfers between spouses on divorce and giving up a main home through a foreclosure or dación en pago. Some towns give a discount on inheritances of the family home.
How buyers get caught
Non-resident sellers make the buyer liable
Article 106 of the local finance law makes the buyer the "substitute taxpayer" when the seller is an individual not resident in Spain. In plain terms, the town hall can bill you. As so many sellers on the coasts are foreigners, this is common. The usual fix is for the buyer to hold back an estimate of the plusvalía from the price at completion and pay it to the town hall.
Contract clauses that shift the cost
Private contracts sometimes say the buyer pays plusvalía. This is a private deal: the town hall still pursues the legal taxpayer, but between the parties you would owe it. Clauses in new-build contracts putting it on the buyer can be unfair to consumers. Your lawyer should read the reservation and private purchase contract for this before you sign.
The retention in practice
- Before completion, your lawyer asks the town hall for an estimate, or calculates it from the IBI bill.
- At the notary, that amount is held back from the price.
- Your lawyer files and pays it within 30 working days, and sends proof to the seller.
- If the real-gain method gives less, the difference goes back to the seller.
This sits alongside the 3% state retention the buyer must also make when a seller is non-resident. That one is paid to the Agencia Tributaria. See non-resident tax in Spain.
Deadlines
- Sales and gifts: 30 working days from the date of the deed.
- Inheritances: six months from the death, extendable by up to another six months if you ask within the first six.
Late payment brings surcharges and interest. The town hall can check your figures for up to four years.
Worked example (objective method)
An owner sells a flat after 10 years. The land's cadastral value is €40,000. The town's coefficient for 10 years is, say, 0.12, and its tax rate is 29%. The base is €40,000 × 0.12 = €4,800; the tax is €4,800 × 29% = €1,392. These figures are illustrative. Use your town's current ordinance for real ones.
Before you buy
Ask for the seller's latest IBI receipt: it shows the land's cadastral value and helps estimate the plusvalía. Read our guides to IBI, the nota simple and selling property in Spain. For a second look at a property, enter the address or referencia catastral on our free property check and we'll get back to you by email.
Questions
Who pays plusvalía in Spain, buyer or seller?
By law the seller pays on a sale, and the heir or recipient pays on an inheritance or gift. But if the seller is not resident in Spain, the buyer becomes liable as the taxpayer's substitute, so buyers usually hold back the amount at completion.
Do I pay plusvalía if I sell at a loss?
No. Since the 2021 reform, there is no tax if you can show the land did not rise in value, comparing the deed prices at purchase and sale. You must declare this and prove it to the town hall.
How long do I have to pay plusvalía?
Thirty working days after a sale or gift, and six months after a death (extendable by up to another six months). Some town halls use self-assessment, others send a bill.
How much is plusvalía?
It depends on the town, the land's cadastral value and how long you owned it. Town halls can charge up to 30% of the calculated gain.