Do you have to pay municipal capital gains tax when you inherit a flat?

Question

José Manuel Alburquerque · Accepted Answer

Usually, yes. When you inherit a flat, a house, commercial premises or a building plot on urban land, a return for the “plusvalía municipal”, the municipal capital gains tax, has to be filed with the local council where the property is located, within six months of the death. Nothing is payable if the property has not gained in value and less is payable if it has gained little. Many councils reduce it by up to 95 % for the spouse, children, grandchildren and parents. Who and when It is paid by the heirs. If someone receives the flat as a legacy, the legatee pays it. If the widow or widower receives the usufruct, he or she pays for that usufruct. The time limit is six months from the death. It can be extended to up to one year if this is requested within those six months. The return has to be filed even if there is nothing to pay. How it is calculated It is charged on the value of the land, not on that of the building. There are two ways of calculating it. The first takes the cadastral value of the land and applies a percentage that depends on how many years the deceased owned the flat, up to a maximum of twenty. The second uses the actual gain. You can ask for whichever gives the lower figure. It is not payable if the value declared for the “impuesto de sucesiones”, the Spanish inheritance tax, does not exceed the value in the deed by which the deceased acquired the property, without adding expenses or taxes. This has to be proved. The reductions Many councils reduce the municipal capital gains tax by up to 95 % when the spouse, children, grandchildren or parents inherit the deceased's home. The reduction has to be applied for within the time limit and each council sets its own conditions. In Barcelona, for example, it is lost if the flat is sold within three years of the death.