Property capital gains tax in Galicia: 2024-2025 changes and how it affects selling your property

What is the municipal capital gains tax?

The plusvalía municipal (officially the Tax on the Increase in Value of Urban Land, IIVTNU) is a local tax levied on the increase in value of urban land when ownership is transferred. It is paid to the town hall where the property is located.

This tax is triggered by any transfer: sale, inheritance, donation or exchange. The seller (or donor, or heir) must pay it, not the buyer.

In Galicia, each municipality sets its own tax rates within legal limits. Costa da Morte municipalities like Cee, Fisterra, Camariñas, Muxía and Corcubión generally have lower rates than large cities like A Coruña or Santiago de Compostela.

The 2024 Constitutional Court ruling: what changes

The Constitutional Court has issued several landmark rulings:

• Judgment 59/2017: declared the objective calculation method unconstitutional where there was no real increase in value.
• Judgment 182/2023: introduced a real gain method as an alternative.
• 2024 Reform: the new law definitively establishes two calculation methods and the lower amount applies.

The fundamental change: no plusvalía can be charged if there has been no real gain. If you buy a flat in Fisterra for €120,000 and sell for €110,000, you should not pay plusvalía.

Key point: If you have paid plusvalía in the last 4 years under conditions now considered unconstitutional, you can request a refund.

The two calculation methods

Method 1: Real gain (new)

Plusvalía = (Sale price - Purchase price) × Land % × Tax rate

Method 2: Objective method (traditional)

Plusvalía = Cadastral land value × Coefficient × Tax rate

Tax rates in Galician municipalities

Exemptions and reductions

• Inheritance: heirs must pay, though Galicia's 99% ISD reduction compensates.
• Donation to descendants: some municipalities reduce up to 95%.
• Main residence of over-65s: exempt if reinvesting.
• Payment in kind (dación en pago): exempt for good-faith debtors.
• Sales at a loss: no plusvalía under the real gain method.

Practical calculation example

You bought an apartment in Cee in 2015 for €90,000, selling in 2025 for €130,000. Building is 20 years old. Cadastral land value: €25,000.

Method 1 (real gain): (130,000 - 90,000) × 20% × 25% = €2,000

Method 2 (objective): 25,000 × 1.00 × 25% = €6,250

You choose Method 1, saving €4,250.

Strategies to reduce plusvalía

1. Always choose the most favourable method.
2. Keep purchase deeds for real gain calculations.
3. Document improvements to reduce the land percentage.
4. Use over-65 exemptions if applicable.
5. Challenge if no real gain occurred.
6. Check and potentially review the cadastral value.

Costa da Morte vs cities: comparison

Selling in Camariñas or Muxía means paying 33% less than in A Coruña.

Deadlines and payment procedure

• Sale: 30 working days from signing the deed.
• Inheritance: 6 months from death (extendable to 1 year).
• Donation: 30 working days from signing.

Practical steps when selling in Galicia

1. Calculate both methods before setting the sale price.
2. Check your municipality's tax rate.
3. Verify the current cadastral value.
4. Gather documentation: purchase deed, sale deed, last IBI receipt.
5. Submit the self-assessment within 30 days.
6. If no real gain, file with zero amount.
7. Keep all receipts for potential refunds.