Local Capital Gains Tax when selling Moraira Property, Plusvalía Municipal
What is the "Plusvalia Municipal" or Local Capital Gain Tax in Moraira?
The "plusvalia municipal" is a local tax, administered by the town halls.
The "plusvalia municipal" or local capital gain tax is a direct tax that only affects, as its name indicates, urban properties (not rustic properties) and the land (not the construction raised on it).
How is the Local Capital Gain Tax calculated?
Basically 4 pieces of information are needed to calculate the local capital gain tax in Moraira or in any other town in Spain.
- The date of the last purchase of the property.
- The date of the purchase and sale of the property.
- The cadastral value of the land
- And finally, a scale applied by each locality, which varies from municipality to municipality.
That is to say, a property that has the same date of acquisition, is sold on the same day and has the same land value, the amount to be paid can vary quite a lot from municipality to municipality, as each municipality applies its own scale.
Who must pay the Local Capital Gain Tax in Moraira or any other town in Spain?
By law, this tax must be paid by the selling party in case of purchase and sale. In the case of inheritance, it is the heir who bears this cost. Both situations are subject to this tax.
However, if the case is that we are not Spanish residents and we do not pay the tax, it is possible that, by law, the buyer is assigned the role of "substitute taxpayer" and has to pay the tax.
To avoid this type of situation, the buyer asks the non-resident seller to leave a deposit to pay the "plusvalia municipal" on the day of the signing of the sale at the Notary's office. In this sense, if we are foreigners and we want to sell our property in Spain, we should know that it is possible that the buyer may ask us for this deposit to make sure that the tax is paid.
This is of a municipal nature, so the payment must be made at the respective town hall within 30 days of the sale of the property.
Who can be exempt from paying the Local Capital Gain Tax in Moraira or any other town in Spain?
In principle, all owners of a property have to pay this tax when selling or inheriting, although there is an exception, according to the ruling of the Constitutional Court in July 2018:
Previously, having paid an exorbitant price for a property that was not worth it (or even worse, having mortgaged it) when the property was sold, whether it was profitable or not, the tax had to be paid.
Since the ruling of the Constitutional Court in July 2018, this tax can be cancelled if a sale has generated a loss, but collection can be requested in the case of a profit.
In order to prove that there has been no "capital gain" taxed by the IIVTNU, the taxable person may:
(a) offer any principle of proof, which at least indirectly allows it to be appreciated, such as the difference between the acquisition value and the transfer value reflected in the corresponding public deeds.
(b) opt for expert evidence confirming such indications.
(c) use any other means of proof ex article 106.1 of the LGT which shows the decrease in value of the land transferred and the consequent inappropriateness of making a settlement for municipal capital gains.
How to calculate the Plusvalia Municipal or Local Capital Gain Tax for Moraira?
If you would like to know the amount of your Local Capital Gain Tax for your Moraira property, or any other town on the Costa Blanca, you can go to your local town hall office or contact Brassa Homes, as we can also calculate the amount payable for the Plusvalia Municipal in Moraira free of charge for you.
NOTE: Please note that this is an estimated approximation.