The Municipal Tax on Increases in Value is a local tax that Spanish municipalities require from property owners who sell their properties for a price higher than what they paid when purchasing it. It is a tax calculated on the increase in the value of the land between the time of acquisition and the time of sale.
This tax paid by the seller is calculated based on the increase in value that the asset has experienced during the time it has been owned. The amount of the Municipal Plusvalía can vary between municipalities and, therefore, it is advisable to consult with the local administration to know the exact amount before making the sale, and thus be able to take into account one of the expenses that the seller has to face. This tax applies to the property when it is transferred, not only in the case of sale, but also if a donation, inheritance (succession) or any other form is made.
This tax is regulated by Article 108 of the Regulatory Law on Local Finances and applies to the transfer of real estate, such as land, buildings, and homes, although it does not apply to assets related to agriculture, livestock, or forestry exploitation.
The municipal capital gains tax in Málaga can be calculated through the website of the Málaga City Council (allowing you to check online which is the most beneficial method for the seller of the property) it can even be paid online through the website.
In 2023, the municipal capital gains tax will increase by 4%. This measure will affect all property owners, who will have to pay an additional tax when selling their properties. It is estimated that this measure will generate additional revenues of around 2 billion euros for Spanish municipalities.
In addition to the above, other tax news related to the sale of housing is expected in 2023. Among them, the fact that the government has announced a plan to eliminate the current tax bonuses on the property transfer tax (ITP) and documented legal acts (AJD) stands out. Likewise, new mechanisms will be introduced to prevent tax evasion and the deadlines for submitting the corresponding declarations for this tax will be relaxed.
