If you have inherited or sold an apartment you will have to pay the municipal capital gain. Given this, one of the questions you will ask yourself is: does an apartment that is more than 20 years old pay capital gains? Next, in this article, we tell you how the capital gain is calculated. Likewise, how much is paid if the apartment has been in the estate of the person transferring it for 20 years or more.
In which cases is the municipal capital gain paid?
The municipal capital gain or Tax on the Increase in the Value of Urban Land (IIVTNU) is paid in the following cases in relation to homes:
– In the case of selling a home, it must be paid by the seller. Except in the event that the property has requested value or has been maintained or the seller has not recorded an increase in the value of the apartment.
– In the case of an inheritance of a home, the heir must pay it
– If a donation occurs, the capital gain is paid by whoever receives the donation.
How is the capital gain payment calculated for a 20-year apartment?
The municipal capital gain is a tax that taxes the increase in the value of a home from the moment a person acquires it until it is transmitted (whether through a sale, inheritance or donation).
The town councils are the ones that establish the multiplier coefficients and the percentages to apply to this tax to carry out the calculation. For this reason, it is very different to pay taxes in one location or another. However, for the calculation there are a series of general criteria that are the following:
– Cadastral value of the land of the home. The municipal capital gain does not consider the sale price for its calculation, but rather the cadastral value of the land. This is an administrative value, which is established in the real estate cadastre. In addition, it appears on the real estate tax (IBI) receipts, as well as in the Electronic Headquarters of the Cadastre.
– The number of years during which the person has owned the property. The municipal capital gain measures the increase in value that the land of a home experiences over time. Therefore, to make the calculation, the years in which the owner has had the property in his possession must be considered. That is, the period of time that has passed since the owner purchased or inherited. All this, until the transmission occurs through sale, inheritance or donation.
To calculate municipal capital gains, municipalities establish ranges of years to which they assign a multiplier coefficient. This must be applied to the cadastral value of the land, to obtain the tax base of the capital gain.
On the other hand, by virtue of Royal Decree 12/26/2021, the system for calculating the tax base of capital gains was modified. Two calculation systems are established:
– The objective method. This method consists of multiplying the cadastral value of the land by the established coefficient. All of this, depending on the period of time that has elapsed between the acquisition and the transmission.
– The method of calculating the real increase. It is applied if requested by the interested person. It consists of applying to the acquisition and transmission values the percentage corresponding to the cadastral value of the land at the time of transmission. Then, you have to calculate the difference between the values obtained.
In the case of Barcelona, the percentage that is applied to calculate the capital gain is always 30%.
Case: Does an apartment that is more than 20 years old pay capital gains?
The answer is yes. The nuance is that 20 years is the maximum period considered to pay the municipal capital gain. In fact, the same percentage would apply if the property was purchased 40 years ago as if it was purchased 20 years ago.
However, the capital gain will not have to be paid in these cases, if the current value of the property is equal to or less than what it had when it was acquired.
However, in cases in which the municipal capital gain does not have to be paid because there has been no increase in the value of the land or there has been a reduction in said value, it is necessary to communicate the transfer made and attach the deed of ownership. transmission and acquisition that proves that the increase in value has not occurred. These documents will be reviewed by the Institut Municipal d’Hisenda which will proceed to verify the declared values.
It may happen that you have already paid the capital gain and later verify that there has not been an increase in the land value of the property. In these cases, you can request a review of the self-assessment paid by submitting an application to which you must attach the acquisition and transfer deeds. Barcelona City Council will analyze the documentation provided and will inform you of the estimate or denial of the request. If the request is approved, the corresponding amount will be refunded.
It may also happen that, for example, an apartment is inherited, the capital gain is not liquidated and it becomes statute-barred. In these cases, self-assessment must be carried out and the system will verify if the prescription has actually occurred. If the prescribed tax is verified, the result of the self-assessment will be zero.
Is it possible to apply a capital gain bonus in Barcelona?
There is the possibility of applying a capital gain bonus of 95% of the installment in two cases:
When the inheritance of the habitual residence occurs
This bonus is subject to the condition that the home is not transferred during the three years following the date of death of the transferor. This bonus can be requested by:
– The spouse, descendants or adoptees or ascendants or adopters.
– Whoever receives treatment from the legal system analogous to a kinship relationship that allows them to continue using the home due to having lived with the deceased for the two years prior to their death. As well as siblings, a person who has an emotional relationship analogous to that of the spouse, people with a proven disability of 65% or more and with a relationship of up to the third collateral degree with the owner.
When the transmission by inheritance of a premises where the deceased person carried out a personal and direct habitual professional activity occurs.
The application of the bonus is conditional on the non-transmission of the premises. In addition, to the continuation of economic activity during the five years following the position.
In the two previous cases, the existing relationship must be proven. If the property maintenance period is not met, the subsidized amount will have to be returned. And to this will be added the applicable late payment interest.
Therefore, in cases of inheritances, donations and sales it is important to know how the municipal capital gain is calculated. In the same way, you have to know that you will have to pay. This applies even if the apartment has been owned by the person transferring it for more than 20 years.
In these cases, it is advisable to have the help of real estate consultants who are experts in home transfers. This way, you will be able to verify how much must be paid for municipal capital gains. Likewise, know in what period, what bonuses can be applied and how to complete the process.
How to value a property
for an inheritance?
