Municipal land value tax (plusvalía municipal) on inherited property

Key rules

• Deadline: File within six months of the death, and request any extension inside those same six months.
• Calculation: You pay the lower of the objective method and the real-gain method.
• No gain: If the property has not gained value, no plusvalía is due.
• Local rules: Each council sets its own coefficients, rate (maximum 30%) and bonus, so figures differ by town.

What the tax is and who pays it

The plusvalía municipal is a town-hall tax on the increase in the value of the land under a property. Inheriting urban property triggers it. The heir or legatee who receives the property is the one who pays. It is separate from inheritance tax.

If the property has not gained value, you pay nothing.

How the amount is worked out

Since the 2021 reform, the town hall's tax office looks at two methods. You pay the lower of the two.

• Objective method: the cadastral value of the land multiplied by a coefficient. Each council sets the coefficient for the number of years the property was held, up to 20 years, and it cannot go above the state maximum.
• Real-gain method: the difference between the transfer value and the acquisition value of the property.

The council then applies its own tax rate to the result. Each council sets that rate, and the legal maximum is 30%. Coefficients and rates differ from town to town, so ask the tax office where the property sits for its figures before you budget. The checklist below walks you through the comparison.

Who files, where and by when

You have six months from the date of death to file. If you need longer, ask for an extension within those first six months. It can add up to six more months.

File and pay at the municipal tax office of the town where the property sits. In some areas a provincial tax agency handles this for the council. Many councils use a self-assessment or a declaration form, and the forms differ, so check how your council does it.

With several heirs, each one is liable for their own share. In practice they often file together. The timeline below shows the steps in order.

Check for a bonus

Councils may give a bonus of up to 95% when a habitual home passes to a spouse, descendants or ascendants. Many do, but some give a lower bonus or none. Conditions are common, such as:

• a maximum cadastral value
• a minimum period of ownership or residence
• a cap on the heir's income

To check, read the council's ordenanza fiscal for this tax on its website, or ask its tax office. Do this before the six months run out, so you know what to budget.

Timeline and deadlines

• The clock starts on the date of death: on the day of death

• Ask the municipal tax office for an extension if you need more time: before the first 6 months have ended

• File the plusvalía and pay it at the municipal tax office of the town where the property sits: within 6 months of the death

• File and pay by the extended date if the extension was granted: up to a further 6 months after the first 6

Checklist

• Find the cadastral land value of the inherited property.

• Ask the town hall's tax office for the coefficient for the number of years the property was held and for its tax rate, which can be up to 30%.

• Work out the real gain as the difference between the transfer value and the acquisition value of the property.

• Compare the objective method with the real-gain method and budget for the lower of the two.

• Read the council's ordenanza fiscal (tax ordinance) on its website, or ask its tax office, to see whether it grants a bonus for inherited homes.

• Check the bonus conditions, such as a maximum cadastral value, a minimum period of ownership or residence, or an income cap for the heir.

Frequently asked questions

What happens if several heirs inherit the same property?

Each heir is liable for the plusvalía on their own share of the property. In practice the heirs often file together at the municipal tax office, which keeps the paperwork in one place.

Does every town hall give a 95% plusvalía bonus on an inherited home?

No, the plusvalía bonus of up to 95% is optional, and each council decides whether to offer it. Where it exists, it covers the deceased's habitual home passing to a spouse, descendants or ascendants.

Do I pay plusvalía if the inherited property has not gained value?

No, you pay no plusvalía where there is no gain in the property's value. Because you pay the lower of the two methods, a small real gain also keeps the bill down.