Discover the differences between Municipal Capital Gains and Capital Gains in the IRPF and know how much you will have to pay for each of these taxes when selling your property in Fuerteventura.
When we sell a property in Fuerteventura, we must take into account the payment of the Plusvalia, a tax that can significantly influence the profit of your operation. But, do you know that there are two types of capital gains tax and that if you are going to sell you will have to face both?
Don’t worry! Differentiating between the two is much simpler than it seems at first glance. Besides, if you did not obtain a capital gain with your operation, you will not have to pay either of them. So that you can understand what each of them implies and in which cases you will and in which cases you will not have to face them, keep reading!
Municipal Capital Gains in Fuerteventura
The Municipal Capital Gains Tax, officially known as the Tax on the Increase in Value of Urban Land (IIVTNU), is a tax on the increase in value of the land on which your home is located, during the time it has been in your property.
How is the Municipal Capital Gains Tax calculated?
Its calculation is based on the time of possession of the property and the cadastral value of the land. After the recent legal modifications, there are several ways of calculation that allow to adjust the taxation according to the real value of the transmission. In our article How to calculate the Plusvalia Municipal in Puerto del Rosario we explain you how to estimate what you will have to pay in Plusvalia Fiscal depending on the calculation method chosen: Actual Plusvalia or Objective Method.
In addition, at Destiny Home we have also created an online calculator with which you can calculate what you will have to pay for Plusvalia Municipal if you are selling a property in Puerto del Rosario or La Oliva.
Who has to pay the Municipal Capital Gains Tax?
When selling a house in Fuerteventura, the Plusvalia Municipal has to be paid by the seller. For this, you will have 30 working days from the signing of the deeds of sale.
Who collects the Municipal Capital Gains Tax?
The Municipal Capital Gains Tax is a municipal tax, so it will be the responsibility of each City Council to collect this tax.
How can you avoid paying the Plusvalia Municipal?
As we mentioned at the beginning of this article, there are certain situations in which you will not have to pay the Plusvalia Municipal when selling your house in Fuerteventura. For example:
- If you have not obtained a real capital gain. That is, if you sell for a lower price than you bought it at the time.
- If you sell a rustic land instead of an urban land, you will not have to pay the Plusvalia Municipal either.
- In addition, municipalities may also include certain exemptions for the payment of this tax in their municipal regulations.
Capital gains tax in Fuerteventura
For its part, the capital gains tax in Fuerteventura refers to the capital gain obtained from the sale of your property. It is a sales tax in Fuerteventura that must be paid through the income tax return and its taxation depends on the difference between the purchase price and the sale price of the property.
Depending on the capital gain obtained, you will have to apply the following tax rates:
- Profit up to 6,000 euros: 19%.
- From 6,000 to 50,000 euros: 21%.
- From 50,000 to 200,000 euros: 23%.
- From 200,000 to 300,000 euros: 27%.
- Profit of more than 300,000 euros: 28%.
Who has to pay capital gains tax?
When selling a house in Fuerteventura, the capital gain in the IRPF has to be paid by the seller. That is to say, the person who transfers the property is the one who must include this capital gain in his Income Tax Return.
Who collects capital gains tax?
The capital gains tax is collected by the Tax Agency through the Income Tax Return.
How can you avoid paying capital gains tax?
As with the Plusvalia Municipal, there are certain situations in which you will not have to pay for the Plusvalia Fiscal of your property in Fuerteventura.
- If you have not experienced a real capital gain, i.e., if you sell for a lower price than you bought at the time.
- If you invest the capital gain obtained from the sale of a primary residence in the purchase of another primary residence.
- If you are over 65 years of age and sell your primary residence, regardless of whether or not you have obtained a capital gain.
In our article Exemptions in the IRPF when selling a house in the Canary Islands you can find all the details about each one of the existing exemptions in the Canary Islands in the payment of the Plusvalia Fiscal.
Differences between Municipal Capital Gains and Personal Income Tax Capital Gains
The main difference between Municipal Capital Gains and Personal Income Tax Capital Gains is the following:
While the Plusvalia Municipal is levied on the increase in value of the land where your property is located during the time it has been owned, the Plusvalia Fiscal is applied to the revaluation of the property during the same period.
Below is a summary table where you can find the main differences between these two taxes:
| CONCEPT | MUNICIPAL CAPITAL GAIN | CAPITAL GAIN IN THE IRPF |
|---|---|---|
| Type of tax | Local (City Hall) | State (Treasury) |
| What is the tax? | Increase in land value | Increase in the value of the house |
| Who taxes it? | Municipalities | Treasury |
| Who pays for it? | The seller | The seller |
| How it is calculated | Cadastral value + years + coefficients | Sale price – purchase price ± expenses |
Are you going to sell a property and you are not sure how much you will have to pay for each of these taxes? In Destiny Home we take care of the sale of your property from start to finish, something that also includes advice on the calculation and filing of taxes.
If you want to know how much you can get for the sale of your property to know whether or not you will have to face any of these fees, you can make use of the Fuerteventura online property valuator, the first valuator on the island designed to estimate in just one minute the selling price of your property.
ONLINE valuation of your property in Fuerteventura. FREE and instant
Frequently Asked Questions about Municipal Capital Gains Tax
The Municipal Capital Gains Tax is a local tax levied on the increase in value of urban land during the time it has been owned by the owner. It is liquidated when a property changes ownership, whether by purchase, sale, inheritance or donation.
There are two methods to calculate the Plusvalia Municipal in Puerto del Rosario:
- Estimated Actual Capital Gain: It is calculated based on the capital gain obtained from the transaction. First, the capital gain (difference between the acquisition value and the sale value) is determined. Then, it is multiplied by the percentage of the cadastral value of the land over the total value of the property, and finally, the tax rate corresponding to the period of possession of the property is applied.
- Objective estimation: It is calculated by applying a multiplication coefficient to the cadastral value of the land according to the years elapsed between the purchase and the sale, and then the corresponding tax rate is applied.
To calculate the Plusvalia Municipal, you need:
- The acquisition value and the sale value of the property.
- The cadastral value of the land, which you can find in the last IBI receipt.
- The years elapsed between the purchase and sale of the property
