Understanding the Plusvalia Tax

Mallorca, being part of Spain, adheres to Spanish tax regulations. When it comes to Plusvalia tax on the sale of property, the rules can be intricate and depend on whether you are a resident or non-resident.

If you sell, inherit or are given a property, Plusvalia tax should be paid by the person selling or donating the property.  

Understanding the Plusvalia Tax

Simply put, the Plusvalia tax assesses the value of the property, (akin to how the UK views capital gains tax). However, this tax in Spain is distinctive because local municipalities, rather than the central government, impose it.

Every property sale, inheritance, or gift falls under the Plusvalia tax. Essentially, it evaluates the urban property value growth from the time of acquisition to sale.

Paying the Plusvalia Tax

Legally, the Plusvalia tax must be settled within a month after property ownership changes hands. Payments are made directly to the local town hall –this is normally carried out either by the buyer's lawyer or the seller.

Calculation Methods

The calculations of the Plusvalia are carried out by the regional town hall and these are normally released a few days prior to the notary date to when the property is signed over to the new buyer.

Some updates, like the zero-tax window for properties bought and sold within a year, are noteworthy for investors. The foundation of the Plusvalia tax calculation evolves annually, considering the fluctuations in the real estate market.

We have more information if you are looking for legal assistance.

Disclaimer 

This is a general guide and not specific to everyone's circumstances. We recommend that you speak directly with a professional based around your personal circumstances when looking to purchase a property as information in this guide may have been updated. 

This information is accurate as of July 2023