As a Real Estate in Malaga ESTE, we are obliged to inform you about the costs that you will have when you will selling a property. One of them will be the Municipal Capital Gain.
Currently the Ministry of Finance is reviewing the disputed Municipal Capital Gains Tax, which is paid when a property is sold, inherited or received as a donation.
In this article you will see how the Municipal Capital Gain for the sale of an apartment in Malaga was calculated until now.
What is the Municipal Capital Gain for Flat?
In the moment of transferring a property through a commercial negotiation, a municipal tax called “Tax on the Increase in Value of Urban Land” must be paid. It is very important to know that this tax is also paid in the case of properties transferred by inheritance. IIVTNU, are the acronyms used to refer to what is more commonly known as Municipal Plusvalía.
Who pays the Municipal Capital Gain Tax?
If it is a transfer of property by sale, it is the seller who pays the Municipal Capital Gain Tax. Otherwise, if it is a transfer of property by inheritance, the heir would be responsible for paying the Municipal Capital Gain Tax.
How to calculate the Municipal Capital Gain for Flat Sale in Malaga?
A capital gain coefficient is applied to the property’s cadastral value, updated on the date of its transmission, according to the requirements of each council.
Let’s see what the maximum possible values of these coefficients would be. An idea: 3,70% would correspond for each year, when a property is between 1 and 5 years old (from the moment of purchase to sale); 3,50% for each year, for all properties between 6 and 10 years old; 3,20% for each year, for properties between 11 and 15 years old; and, finally, 3% for each year, those properties that are between 16 and 20 years old.
It is important to note that the maximum number of years to compute is 20. In the case that the date between the purchase date and the sale date is more than 20 years, the calculation would be solely and exclusively as follows: 20 x 3% (60%). Setting this value as a maximum.
Next, once we know which capital gain coefficient corresponds to apply to the Cadastral Value of our property, we finally calculate the Municipal Capital Gain of the sale or inheritance. For this, we apply the respective Capital Gain Coefficient, without decimals, to the Cadastral Value. Which will give us as a result the Tax Base on which the tax in question will be applied.
Finally, we calculate the final amount to be settled. Which will vary according to the type of tax that corresponds depending on each municipality. A maximum of 30% on the tax base. And, in this way, we will have solved the question of how to calculate Municipal Capital Gain for the sale of a flat in Malaga.
An example with the Malaga City Council
Acquisition date: 1995
Estimated air date: 2019
Years elapsed: 24 (over 20)
Cadastral value of the land: € 24,766.28
Annual percentage: 3%
Value increase: 20 x 3% = 60%
Taxable base: 14,859.6 (calculated without counting the decimals of the cadastral value)
Tax rate: 30%
Total to settle: € 4,457.88