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If you have received an inheritance or donation of a property, one of the most important things you should keep in mind is the municipal capital gains tax. We tell you all the details about this municipal tax.
Contenido
- 1 What is the municipal capital gains tax
- 2 Paying capital gains tax in case of inheritance or donation
- 3 Who Pays the Capital Gains Tax in Case of Inheritance or Donation?
- 4 The Municipal Capital Gains Tax is Paid to the Town Hall
- 5 Steps to Follow to Calculate the Municipal Capital Gains Tax
- 6 Do you have to pay if the property has not increased in value?
What is the municipal capital gains tax
This is a municipal tax that you must pay within 30 days from the moment you receive the corresponding inheritance or donation. Its full name is Tax on the Increase in Value of Urban Land (IIVTNU).
This tax levies the difference in the value of the land from the time of acquisition to the time of sale or transfer to another person with a tax base.
Therefore, the debt must be paid and remedied with the public administration whenever we sell a property of our property, but it must also be done at the time an inheritance or a donation in life is received.
Personalized Capital Gains Tax Budget
Appraisal Company Approved by the Bank of Spain
Paying capital gains tax in case of inheritance or donation
If you receive an inheritance from a family member or a donation in life, you do not always have to pay this municipal capital gains tax.
This only occurs if what you receive is an urban property. That is, a house or apartment, premises, industrial building or garage or urban land of any kind.
When we talk about an urban property, we are referring to a property built on urban land (urbanized) that can occur both in a city and in a small town.
On the other hand, if what is received in inheritance or donation is a rustic property, this capital gain does not have to be paid. Just as this capital gain should not be paid in case of receiving stock values, money in cash, etc. The municipal capital gains tax only affects real estate on urban land.
>>> Learn about the importance of properly appraising an inheritance.
Who Pays the Capital Gains Tax in Case of Inheritance or Donation?
Well, the answer to this is relatively simple and makes a lot of sense.
- In the case of an inheritance, the person who must pay the capital gains tax is whoever receives the inheritance. It is quite logical since the person from whom the inheritance is received no longer lives (hence the existence of the inheritance) so the person who must pay the corresponding fee is the person who benefits from the inherited assets.
- If it is a donation, the case is the opposite. It will be the person who donates the property who has to pay the municipal capital gains tax. He will do so for the amount resulting from the difference between the current value of the property (even if he does not sell it) and that of the moment he acquired it. That is, for tax purposes it is considered as a sale, even if it is not actually being sold.
The Municipal Capital Gains Tax is Paid to the Town Hall
When paying the capital gains tax corresponding to a property, it is the town hall of the locality where it is located that manages it.
It can be done by two methods.
The Self-Assessment of the Municipal Capital Gains Tax
In the case of the self-assessment of the capital gains tax, it is the heir or who receives the donation (in this case) who goes to the town hall to settle this tax voluntarily.
Presenting the deed of acceptance of inheritance, the will, declaration of heirs or certificate of last wills and the corresponding titles of acquisition.
This self-assessment can be done within 6 months from the death of the person from whom it is inherited. Although there is always the possibility of requesting an extension of another six months until the Inheritance Tax is settled first.
In the case of a donation, the term to be able to make this voluntary self-assessment is 30 business days from the day the donation is made. That is, the same term as in the case of a sale of the property.
Settlement of the Capital Gains Tax by the Town Hall
This second way to pay the capital gains tax is managed directly by the town hall. This is who communicates to the heir or the donee (who receives a donation) the settlement of the fee.
The town hall communicates the amount of the capital gains tax to be paid, in what terms and the payment formula and also the options and terms that exist to appeal the resolution.
Steps to Follow to Calculate the Municipal Capital Gains Tax
Finally, we have to explain how to calculate the capital gains tax. It is something that many do not clarify with what it is convenient to take paper, pen and calculator to be able to make an approximate calculation.
- Be clear about the value of the property at present (cadastral value of the land). It can be obtained in the cadastre, but it must also be included in the last IBI receipt.
- Locate the value of the asset at the time of purchase or acquisition.
- With this, the taxable base is calculated. Which is nothing more than the difference between the current value and the value at the time it was acquired. It always has a limit of 20 years.
- Find the percentage of increase. This is achieved by multiplying the number of years that have passed since the acquisition until the donation/inheritance, by a coefficient fixed by the corresponding town hall. This varies around 3-4% depending on the years elapsed up to a maximum of 20 years.
- The tax rate is fixed by the town hall, but can never be higher than 30%.
Do you have to pay if the property has not increased in value?
It is something that happens sometimes, although not often: that instead of having increased its value, the property has lost it.
There are judgments of both the Constitutional Court and the Supreme Court that consider it unconstitutional to charge this fee in the event that the property has not increased its value.
Therefore, the person who inherits or receives the donation must try to prove to the town hall that there has been no increase in value. Even so, the usual thing is that the town halls do charge said fee giving rise to the corresponding judicial conflicts between the administration and the individual who receives the inheritance or donation.
In these cases, it is advisable to have the help of a good lawyer and specialist in these matters so that they can advise you with guarantees of success in the judicial process.
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Personalized Capital Gains Tax Budget
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