Whenever an urban property is sold, donated or inherited in Spain, it is subject to “Plusvalia”, a tax on the increase in value from when it’s bought until it’s sold. It is normally paid by the seller, although the two parties can negotiate sharing it. In the case of inheritance, the person receiving the property needs to pay.
Since November 2021 there are 2 ways to calculate the Plusvalia, allowing the tax payer to choose the method that gives less tax burden. One is the existing method based on official land registry values (which the government is gradually wanting to move away from), and the other is based on actual purchase and sale prices. The land registry values (“valor catastral”) is the rateable value of a property offiially used to calculate property taxes, and it is revised yearly. It does not necessarily follow market prices, so it may be beneficial to use this method while it’s still available. You do not need to pay anything if you sold at a loss.
The Plusvalia is paid to the town hall within 30 days of the sale transaction. It is estimated that more than 2.5 billion euros are collected as income by the town halls in this way, so it’s important to not miss the deadline, as they are motivated to consider it an important infraction.