With the name of "Municipal capital gain”Is known to the Tax on the Value of Urban Land regulated by the Local Finance Law. This tax is levied on the "increase in value experienced by said lands and becomes apparent as a result of the transfer of ownership of the lands."

This tax is increasingly important for municipalities as land values ​​have been corrected and the result is that it has been increasing year by year.

From the Bosch & Bages Notary I think you are interested in knowing:

  • The maximum taxable period is 20 years. In other words, when more than 20 years elapse between the acquisition and the disposal, the tax does not rise further. It is met at age 20.
  • The jurisprudence of the Supreme Court affirms that if the purchase value is higher than the sale value, that is to say, that the sale represents a loss for the seller: there is no capital gain; there is no taxable event and the tax is not paid. But, and this is important, you have to request it.
  • The tax is produced when there is a transmission, by any title: sale, exchange, donation, inheritance etc ...
  • The limitation period is the general one: 4 years, counting from the end of the voluntary payment period, which is 1 month for purchases and 6 months for inheritances.

In the Notary of Barcelona Bosch-Bages you can make an appointment to resolve any questions related to municipal capital gains. Since this tax is usually related to the sale of a property, it is important to know in detail all the aspects related to it. We always advise our clients to inform themselves as well as possible of all aspects related to a real estate operation.