QUESTIONS & ANSWERS
Q : I want to sell my property, but I have been told that I have to pay a Pluvalia Tax – what is this?
A : It is for the increase in the value of land over a maximum period of twenty years, from when it is sold.
The value is adjusted by the percentage determined by each municipality, but will not exceed the following:
• Up to 5 years: 3.7%
• Up to 10 years: 3.5%
• Up to 15 years: 3.2%
• Up to 20 years: 3%
It is normally the seller who is obliged to pay this tax, however if the seller is a Non Resident and does not pay the plusvalia tax, the Spanish Tax office can make the purchaser pay it, instead.
To calculate the Plusvalia Tax you must to take into account the value of the land at the time of the sale. This can be done by checking the IBI bills (SUMA – Council Tax).
If you would like to know how to calculate this tax, you can do the following:
Multiply the number of full year’s ownership from the date of the purchase, with a maximum of twenty years, and then applying this to the table of percentages mentioned above. The tax rate will be set by each municipality, but cannot exceed 30%.
• Land value: 5,000 euros
• Purchase Date: 01/06/2000
• Sale date: 30/05/2014
• Tax rate: 5,000 x (13 x 3.2)% x 30% = 5,000 x 41.6% x 30% = 624 euros
If you have any further questions about this or any other legal matter, please do not hesitate to contact us; we have a team of experts standing by to assist you in any way we can.