What is the Plusvalía Municipal?
The Impuesto sobre el Incremento de Valor de los Terrenos de Naturaleza Urbana (IIVTNU) — universally known as the plusvalía municipal — is a local tax levied by Spanish town halls (Ayuntamientos) when urban land changes hands through a sale, inheritance, or gift. It taxes the theoretical increase in the value of the land (not the building) between when the current owner acquired the property and when they dispose of it. It is completely separate from the national capital gains tax (IRPF/IRNR).
In Mijas, La Cala de Mijas, and all Costa del Sol municipalities, the plusvalía is administered by the local Ayuntamiento — not the national tax authority. It is calculated using the cadastral value of the land component of the property and the number of years of ownership.
The 2021 Constitutional Court Reform
The plusvalía municipal became controversial and legally challenged because it was applied even when a property was sold at a loss — meaning sellers paid tax on a theoretical gain that never existed. The Spanish Constitutional Court ruled in October 2021 that this was unconstitutional and struck down the old calculation rules. The government immediately reformed the law (RD-Ley 26/2021), which came into effect on 10 November 2021.
The reformed system provides two calculation methods, and sellers can choose whichever gives the lower tax liability:
- Method 1 — Objective method: Based on the cadastral value of the land multiplied by a coefficient determined by the ownership period (set by the government and updated annually). Simple and predictable.
- Method 2 — Real gain method: Based on the actual proportional increase in value of the land between purchase and sale. Requires knowing the land's share of the purchase and sale prices (usually determined from the IBI records or an official apportionment).
Zero gain / sale at a loss: If there is no real gain (the property sold for the same or less than it was purchased for), the plusvalía is zero — no tax is due.
Who Pays the Plusvalía?
The plusvalía is legally the seller's tax in a sale. In an inheritance, the heirs pay it. In a gift (donación), the recipient pays it.
Contractually, buyer and seller can agree who bears this cost — but it is unusual for buyers to accept this burden in a normal private resale. For properties sold by non-residents, the buyer is often designated as substitute taxpayer (sustituto del contribuyente) by the Ayuntamiento — meaning the buyer can be pursued for the tax if the seller fails to pay. This is why your lawyer always verifies plusvalía compliance at completion.
How Much is the Plusvalía?
The amount varies significantly by municipality and ownership period. As a rough guide, for a property in Mijas with a land cadastral value of €50,000 sold after 10 years of ownership under the objective method, the plusvalía might be in the range of €1,500–€4,000. For higher-value properties in more expensive areas (Marbella, for example), it can run to tens of thousands of euros. Your lawyer calculates the exact amount using both methods before completion so there are no surprises.
Plusvalía in Inheritances
When a property is inherited, the plusvalía is triggered and payable by the heirs — even though no money has been received for the property. Payment is due within 6 months of the death, with a possible 6-month extension. In Andalucía, most family inheritances benefit from very favourable inheritance tax rates (close to zero), but the plusvalía is always owed to the local Ayuntamiento and is separate from the regional inheritance tax.