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How is plusvalia calculated?

Tax Law

Francisco Garcia Ramirez

18th of August 2001

Q. How is plusvalia calculated?


    A. The plusvalía is calculated by the local Town Hall of each municipality using formulas which take into account different variable such as the ratable value of the land and the number of years elapsed since the last purchase. This commonly known plusvalía tax is more formally know as Tax on the Increase on the Value of the Land.

    This tax is not affected by the gain made on the sale of the property, and therefore it will be calculated without taking into account the original purchase price and the sales price. In order find out the plusvalía tax amount, you need to go to the local Town Hall where the property is located with your purchase sale deed and a IBI receipt for that property. They will tell you the tax accrued if the property was to be sold on that date.

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