The „Impuesto sobre el Incremento del Valor de los Terrenos de Naturaleza Urbana“(IIVTNU)

IIVTNU commonly known as "Plusvalía" in Spain, is a local tax that is applied during the transfer of ownership of urban land. This tax taxes the assumed increase in value that urban land experiences from its acquisition to its subsequent transfer. Therefore, it is based on the difference in value between the price at which the property owner acquired the property and the value at which they are selling it. This tax is paid by the seller upon the transfer of 4.property ownership.

The calculation of the "plusvalía" is based on several factors, including the cadastral value of the land, the time since its acquisition, and the tax rate set by the municipality. However, in practice, the method of calculation can vary among different municipalities. The calculation of this tax is handled by the town hall of the respective district.

It's important to note that this tax can be controversial, as in some cases, especially during periods of declining real estate market, the value of the land may not have increased but instead decreased. Nevertheless, property owners are often obliged to pay the local tax for the increase in the value of urban land when selling their property.

Some municipalities allow exemptions or reductions in "plusvalía" under certain circumstances, such as when transferring ownership to first-degree relatives. However, the rules and rates can differ between municipalities and autonomous communities.

It's crucial to consult with a tax advisor or local authorities to obtain accurate information about how the Tax on the Increase in Value of Urban Land is applied in a specific location and situation.