<\/p>\n
The Municipal value added tax, also known as the Tax on the Increase in Value of Urban Land (IIVTNU), it is the direct tax that taxes the increase in the value of a property during the years of possession and until its transmission.<\/p>\n
This means that, if you are going to sell a flat or a house, the municipal capital gain establishes how much your property has appreciated during the entire time it has been yours. This tax is the sole and exclusive responsibility of each city council (Royal Legislative Decree 2\/2004, March 5).<\/p>\n
As we have mentioned before, the municipal capital gains is a local tax collected by the municipalities. This tax is paid by the seller of the property. In some cases it may be paid by the buyer, if both parties so establish.<\/p>\n
But there are also exceptions as to who pays the municipal capital gains. When the person who transfers the home does not reside in Spain, it will be the buyer who will have to pay the tax.<\/p>\n
In addition, in the case of a donation, it is the person who receives the good who must pay the municipal tax. On the other hand, taxpayers who inherit a property must also pay this tax.<\/p>\n
To calculate the amount of municipal capital gains, the type of tax set by each specific municipality must be applied to the increase in the value of the land. This tax may in no case exceed 30 percent.<\/p>\n
The increase in land value varies depending on two factors. On the one hand, it varies depending on the value at the time of transmission. On the other hand, it also changes depending on the years that the transmitter has owned the land, with a maximum of twenty years. This value can be found on the IBI (Real Estate Tax) receipt.<\/p>\n
To determine the exact amount of the capital gain, the value of the land is multiplied by the number of years that the property has been owned and by the annual percentage determined by each municipality within the legal limits.<\/p>\n
The time you have to pay the tax depends on the type of operation you are going to carry out. For example, in a home sale or donation, the term is 30 business days from the date of transmission.<\/p>\n
But if it is an inheritance, you have 6 months from the date of death, extendable to one year if requested in writing within the first six months. Another detail to take into account are the deadlines, since not making the payment within the dates enabled for each case may entail extra penalties and surcharges.<\/p>\n
In this case, in addition to paying the entire corresponding amount, you will also have to assume late-payment interest, the penalty for non-payment and the surcharge for paying it out of time, which is called extemporaneous presentation.<\/p>\n
In the event that you continue without making the payment, the city council could claim the amount through executive proceedings and could even seize your property and assets to collect the debt.<\/p>\n
The municipal surplus value became a controversial tax because this tax was applied regardless of whether or not there was a benefit derived from the sale. This meant that if you sold your house for less than what you bought it for, you also had to pay the municipal capital gains.<\/p>\n
For this reason, in recent years, its application has been called into question. But months ago the Constitutional Court established that the collection of capital gains was not legal when a property had been transferred for a price equal to or less than its acquisition price.<\/p>\n
From there, people who had had to pay the tax even though they had sold their house at a lower price, had the possibility to claim the tax refund.<\/p>","protected":false},"excerpt":{"rendered":"
What is the Municipal value added tax in Spain?\u2026<\/p>\n","protected":false},"author":19,"featured_media":470859,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1,961],"tags":[],"class_list":["post-470856","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-articles","category-taxes-and-laws"],"yoast_head":"\n