Plusvalía municipal in Spain: the tax foreign sellers pay

What is plusvalía municipal

Plusvalía municipal (IIVTNU) is a tax on the increase in value of urban land during the period you owned the property. It applies only to urban (suelo urbano) properties — rural land is exempt. It is local: each municipality (ayuntamiento) sets its own rates within national caps.

Crucially, plusvalía taxes the LAND value, not the construction. So even if your property is mostly built area, the tax base focuses on the proportional land value. The cadastral value of the property splits into 'land value' (valor del suelo) and 'construction value' (valor de construcción) — plusvalía uses only the first.

This tax is independent of and additional to the national capital gains tax (IRNR for non-residents). You pay both: plusvalía to the city council, IRNR/IRPF to the State (AEAT). Both have separate forms and deadlines.

Who pays and when

In a sale, the SELLER is the taxpayer. But when the seller is a non-resident individual, the law makes the BUYER the 'sustituto del contribuyente' (art. 106.2 of the Local Finances Act): the buyer files and pays the tax to the town hall. The deadline is 30 working days from the notary signing date (art. 110.2).

Some city councils have a system of 'autoliquidación' (self-assessment, filed and paid by the taxpayer); others have 'liquidación' (you notify the council, which calculates and sends the bill). Madrid, for example, uses self-assessment — a gestor or lawyer usually files it.

For non-resident sellers, the practical mechanic is: at the notary signing, the buyer withholds from the price the amount of the plusvalía, because the buyer is the one who has to pay it to the council.

Two calculation methods (since 2021 reform)

The Constitutional Court declared the previous mandatory objective method unconstitutional (Sentencia 182/2021), and Real Decreto-ley 26/2021 created two alternative methods. The taxpayer chooses whichever produces a LOWER tax bill:

Method 1 — Objective (cadastral): apply official coefficients to the cadastral land value depending on years of ownership. The coefficient increases with holding period up to 20 years.

Method 2 — Real (actual gain): difference between sale price and purchase price, multiplied by the proportion of land value over total cadastral value.

If you sold at a LOSS (sale price < purchase price), there is no taxable gain at all and plusvalía is €0. You must still file the form, with proof of both prices. Many sellers miss this and overpay.