Plusvalía Tax When Selling Property in Spain: How It Works in 2026

The plusvalía municipal (officially the Impuesto sobre el Incremento de Valor de los Terrenos de Naturaleza Urbana, or IIVTNU) is a local tax charged by the ayuntamiento (town hall) on the theoretical increase in the land value of a property since the previous transfer. It applies every time urban property changes hands: on sale, inheritance, or donation. It is separate from capital gains tax, separate from IBI, and administered locally rather than nationally. Each municipality sets its own rates and coefficients within the limits established by national law.

The tax only applies to the land component of the property, not the building. For an apartment in a complex, your share of the land is proportional to your participation quota (cuota de participación) in the community. For a villa on its own plot, the full land value applies. The catastral value of the property, which appears on your IBI receipt, is split between building value (valor de construcción) and land value (valor del suelo). Only the land value is used for plusvalía calculations.

Crucially, the plusvalía is due within 30 working days of the sale (escritura de compraventa) or within 6 months in the case of inheritance. In Marbella, the form is submitted to the Oficina de Recaudación Municipal. Late filing incurs surcharges of 5-20% depending on the delay, plus interest. We advise sellers to calculate the plusvalía before completing the sale, so there are no surprises at the notary.

On 26 October 2021, Spain’s Constitutional Court (Tribunal Constitucional) declared the existing plusvalía calculation method unconstitutional. The old method presumed that land always increased in value over time, applying fixed coefficients to the catastral land value based on the number of years held. The court ruled this was unfair because it taxed fictional gains, particularly for properties sold during or after the 2008 crisis at prices below their acquisition cost.

The ruling created a legal vacuum: the tax existed, but there was no valid method to calculate it. In response, the government passed Royal Decree-Law 26/2021 on 8 November 2021, introducing a new dual-method system that has been in force since. Under the new framework, taxpayers choose whichever of two calculation methods produces a lower tax bill. This represented a fundamental shift: for the first time, the actual transaction price became relevant to a tax that had previously been based entirely on catastral values and holding periods.

We see this regularly with clients who bought properties at peak 2007 prices and are selling in 2026. Under the old system, they would have owed substantial plusvalía based on the assumed increase in land value over nearly 20 years. Under the new system, if their sale price is below or near their purchase price, the "real" method may produce a significantly lower tax or even zero tax. The 2021 ruling was genuinely beneficial for many Costa del Sol sellers.

Method 1, the "real" method (estimación real), calculates the actual gain on the land component. Take the sale price minus the purchase price, then apply the land percentage from the catastral value to isolate the gain attributable to land. Multiply this gain by the municipality’s tax rate (up to 30% maximum). For example: you bought for €1,000,000 and sell for €1,300,000, a total gain of €300,000. If the catastral value is 40% land, the land gain is €120,000. At Marbella’s maximum rate of 30%, the plusvalía is €36,000.

Method 2, the "objective" method (estimación objetiva), is similar to the old system but with updated coefficients. Multiply the catastral land value by a coefficient set annually by the government based on how many years you held the property (ranging from 0.14 for properties held one year to 0.45 for 20+ years, though these coefficients are revised annually). Then multiply by the municipal tax rate. For the same property with a catastral land value of €150,000, held for 10 years (coefficient approximately 0.08 in recent years), the base is €12,000, and at 30% rate, the tax is €3,600.

In this example, the objective method produces €3,600 versus the real method’s €36,000, so the taxpayer would obviously choose the objective method. However, for properties held for shorter periods with large gains, the real method may be lower. We always calculate both and advise sellers which to declare. The municipality cannot force you to use one method over the other; the choice is the taxpayer’s right under the law.

Property held 5 years: purchased 2021 for €800,000, selling 2026 for €1,000,000. Catastral value: €300,000 (40% land = €120,000). Real method: total gain €200,000, land share €80,000 (40%), tax at 30% = €24,000. Objective method: €120,000 x 0.17 (5-year coefficient) = €20,400, tax at 30% = €6,120. The objective method saves €17,880. Note: the coefficients used here are illustrative; the exact figures are published annually by Royal Decree and should be verified at the time of sale.

Property held 10 years: purchased 2016 for €600,000, selling 2026 for €900,000. Catastral land value: €100,000. Real method: gain €300,000, land share €120,000 (40%), tax at 30% = €36,000. Wait: the land share of the gain uses the catastral split applied to the total gain. Objective method: €100,000 x 0.08 (10-year coefficient) = €8,000, tax at 30% = €2,400. Again, the objective method is substantially lower.

Property held 20 years: purchased 2006 for €500,000, selling 2026 for €1,200,000. Catastral land value: €180,000. Real method: gain €700,000, land share (40%) = €280,000, tax at 30% = €84,000. Objective method: €180,000 x 0.45 (20-year coefficient) = €81,000, tax at 30% = €24,300. The objective method saves €59,700. For long-hold properties with large gains, the difference between methods is dramatic. This is why professional calculation before the sale is not optional.

Spanish law assigns the plusvalía to the seller in a standard sale. However, "legally responsible" and "who actually pays" are different things in practice. In many Costa del Sol transactions, the allocation of plusvalía is negotiated as part of the overall deal terms. Some buyers agree to absorb it as part of their total acquisition cost. Some sellers deduct it from their asking price. In off-plan purchases from developers, the developer (as original seller of the individual unit) typically pays the plusvalía.

In Marbella specifically, the market convention is that the seller pays. This is consistent with most Spanish municipalities. However, in inheritance cases, the heir (who is the recipient, not the "seller") is the taxpayer. And in donation cases, the recipient also bears the tax. We always clarify plusvalía responsibility in the purchase offer (contrato de arras) to prevent disputes at the notary stage. If you are buying, ensure the contract specifies who pays the plusvalía so there is no ambiguity.

One additional point: if the seller is a non-resident, the buyer is required to retain 3% of the purchase price and pay it to the tax authority as a guarantee against the seller’s capital gains tax liability. This 3% retention is separate from the plusvalía and covers the seller’s non-resident capital gains tax (IRPFNR). The seller can reclaim any excess after filing their capital gains return. We see confusion between these two obligations regularly, so it is worth keeping them clearly separate in your financial planning.

The most significant exemption since the 2021 ruling is for sales at a loss. If you can demonstrate that the sale price is lower than the purchase price, no plusvalía is due because there is no increase in value to tax. You prove this by presenting both the purchase and sale deeds (escrituras), which show the declared transaction prices. If the selling price equals or is below the buying price, you file a declaration (autoliquidación) showing zero tax due. The municipality may challenge this if they believe the prices do not reflect market value, but the burden of proof shifts to them.

Other exemptions include transfers between spouses as part of a divorce settlement (disolución de gananciales), transfers to entities classified as non-profit (entidades sin ánimo de lucro), and certain historic property transfers. Inheritances between spouses in Andalucía are not exempt from plusvalía (unlike inheritance tax, which enjoys the 99% reduction), but the heir can request payment in instalments over five years if the amount exceeds a defined threshold. Properties held for less than one year are also exempt under the current coefficient system, as the minimum holding period coefficient starts at year one.