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How is municipal capital gains calculated?

Posted on by Marc Van Synghel

A Constitutional Court ruling (TC) has given the opportunity for many people to be able to recover the municipal capital gains tax. In a previous post we tell you how to claim it and in this one, we will see how it is calculated.

We must remember that the real name of this tax, which we all call municipal capital gains, is imposed on the increase in the value of the Land of urban nature (IIVTNU). It must be paid when an increase in the value of the land between purchase and sale has occurred in a transaction. Obviously, if there is no gain, there is no surplus, although the reality is not.

What happened? With the crisis, price declines have led to sales below the purchase value. But even in these cases, the municipal coffers continue to collect for this tax. The problem is that the city councils are based on the cadastral value of the soil. A methodology that ends up causing capital gains, regardless of whether the actual value has not increased.

How is surplus value calculated?

There are several facts to consider:

The main one is the cadastral value of soil: it can be seen in the receipt of the IBI or in the cadastre.

The number of years elapsed from the date of acquisition of the property up to the date of transmission.

Important The location of the house, it all depends on the tax regulating the taxation of the municipality where the property is located.

With all this data, and taking into account the coefficient of increase or rate of revaluation (the maximums usually hover 3.5%) and the tax rate established by the City Council (maximum approximate 30%), the amount to be paid is calculated. In this link you can see the tax rates and reductions. Some municipalities have bonuses or reductions depending on each case and especially in the inheritances.

Both percentages will be depending on the years that the property has been owned.

The more years have passed since the purchase of the property at the time of the transmission, the higher the tax will be. But. This will only apply when less than 20 years have elapsed between transactions, since those years the tax no longer increases.

Every town hall, an ordinance

As the operations are convoluted. From here, the best, and given that each city Council has its ordinance on it, enter the web of the members and enter the data. and automatically calculates what you have to pay for.

And remember that the value of selling and buying the house is not considered for the purposes of calculating this city tax. The land cadastral value will only be taken for calculation.

For the time being, this is the formula for calculating municipal capital gains, provided for in the local Treasury law, which has been questioned for years. After the different sentences, maybe they modify the system to calculate the surplus value in the future.

The city councils believe that the ground is not low and the reality has shown that it does. But with your discretion, the taxpayer always pays more, even if the total amount of your home is less.


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