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Expert Advice
Knowledge Base 16: Understanding Plusvalia: A Guide for Property Buyers in Hondon Valley
PLUS VALIA: THE STEALTH TAX.
As a reputable real estate agent with 17 years extensive experience in the Hondon Valley area, I believe in keeping my clients well-informed.
Today, let’s discuss an important topic that arises when selling property: Plusvalia, also known as the Municipal Capital Gain.
What is Plusvalia? Plusvalia is a tax on the increase in value of urban land imposed by the local administration when a property is transferred, whether through a sale, inheritance, donation, or other means.
When Does an Increase in Land Value Occur? In most cases, there is an increase in the value of land over time, and this is why we are obligated to pay this tax. The town hall calculates the capital gain using coefficients based on the years elapsed since the acquisition and transfer of the property. It is important to note that the calculation is based on the cadastral value of the land, not the values stated in the notarial deeds.
Even if you sell a property at a loss (e.g., purchased for €100,000 and sold two years later for €50,000), the administration will still issue a capital gains tax settlement because, according to their calculations and coefficients, the value of the land will have increased.
Recent Legal Developments: Following a Constitutional Court Judgment in October 2019, situations where there is no actual increase in land value are no longer subject to this tax. This ruling has resulted in a surge of lawsuits seeking repayment of undue amounts paid through the capital gains tax.
Navigating the intricacies of Plusvalia can be complex, but with the right guidance and legal expertise, you can reclaim any undue payments. As a trusted real estate agent, I am committed to assisting my clients throughout the entire property buying process, including providing valuable information about taxes and legal matters. Feel free to reach out to me with any further questions or concerns.
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Our website is full of useful information for buyers and sellers alike. We have information and advice videos, free to download eBooks as well as blogs and articles to educate our buyers and sellers so they make the most informed decisions.
Buyers Videos: https://hondonvalleyhomes.com/category/for-buyers/
Buyers ebooks: https://hondonvalleyhomes.com/free-buyers-guide/
Buyers FAQ: https://hondonvalleyhomes.com/faq_categories/buyers-faq/
Sellers Videos: https://hondonvalleyhomes.com/category/for-sellers/
Sellers eBooks: https://hondonvalleyhomes.com/free-sellers-guide/
Sellers FAQ: https://hondonvalleyhomes.com/faq_categories/sellers-faq/
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