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All the information on how the municipal capital gains tax will be calculated in 2021

When selling or inheriting a property, it is also necessary to take into account the calculation of the municipal capital gain. This is an amount that reflects the percentage increase in the value of the land where the property is located, and therefore depends on the Autonomous Community where the property is located.

Recently, on 26 October 2021, the Constitutional Court annulled the method used to calculate the taxable base of this tax. Since this November, a new way of calculating this tax, on which a large part of the income of local councils depends (after IBI), has been approved. Here we tell you how to do it.

 

Evolution of the capital gains tax

Since it was approved in 2004, the issue of how to calculate the municipal capital gains tax has been a hotly debated topic in the legal sector.

The first judicial setback occurred in 2017, where its application had been annulled in cases where the sale of the property produced a real loss of value of the property. Then, in 2019, there was another ruling against this tax where its application was annulled in cases where the amount to be paid was even higher than the effective capital gain.

And finally, on 9 November 2021, the Constitutional Court annulled this tax, considering its calculation method to be “unconstitutional”.

The new capital gains tax reform seeks to provide “legal certainty” to all taxpayers.

 

What you should know about municipal capital gains tax

Calculating the plusvalia municipal in real estate terms refers to the tax on the increase in value of urban land (which excludes all rural land).

This payment is made in the corresponding Town Halls, and it is important to bear in mind that:

  • It is a tax that corresponds to the seller, although an agreement can be reached for it to be paid by the buyer, by means of a clause in the contract of sale.
  • It is a value that has nothing to do with the net price of the property.
  • In case of sale, it has a period of 30 days to be paid from the moment of the deed.
  • It is only settled when the property is sold at a profit.
  • The Royal Decree of 26 October states that this resolution has no retroactive effect.

 

 

The new methods and how they are calculated

Previously there was only one method for calculating the capital gain. It consisted of applying a coefficient to the cadastral value of the land, which only varied according to the number of years that had passed (up to 20 years) between the purchase of the property and its sale.

To this was applied a capital gains tax, which in the city of Barcelona is always 30%, regardless of the number of years of ownership of the property.

With the Royal Decree of 26 October, the Ministry of Finance has created two new methods for calculating capital gains tax:

  • The objective system

Maximum annual coefficients have now been established to replace the coefficient according to the number of years of ownership of the property.

This coefficient is pre-fixed and is applied to the cadastral value of the land, which will be revised and updated every year according to the evolution of the real estate market.

It will be the task of each Town Hall to adapt the cadastral value to the real estate market, and they can choose to apply the maximum coefficient or a lower one.

And on this result, the corresponding percentage of the tax, which cannot exceed 30%, will be applied.

 

Periodo Coeficiente
Inferior a 1 año 0,14
1 año 0,13
2 años 0,15
3 años 0,16
4 años 0,17
5 años 0,17
6 años 0,16
7 años 0,12
8 años 0,10
9 años 0,09
10 años 0,08
11 años 0,08
12 años 0,08
13 años 0,08
14 años 0,10
15 años 0,12
16 años 0,16
17 años 0,20
18 años 0,26
19 años 0,36
Igual o superior a 20 años 0,45

 

  • Real Capital Gains

Individuals may choose this method if the difference between the sale price and the purchase price is less than the taxable base calculated under the objective system.

 

Can I choose the methods?

The great novelty now is that the payment of the capital gains tax will depend on each case. If the taxpayer proves that the actual capital gains method is the most beneficial method, he or she can apply to the local council.

 

 

Inheritance and capital gains tax

Calculating capital gains tax on inheritance has different features:

  • It is related to inheritance tax.
  • In some municipalities they apply rebates of up to 95%.
  • When the property is inherited, it is paid according to the time during which the family member had it in their possession. And also, it is paid from the moment it is inherited until it is sold.
  • They give 6 months with an extension of 6 more months, to liquidate before the Town Hall.
  • If the property is inherited and sold in the same fiscal year, in theory this tax is paid only once, as the value of the land of the property has not changed during this period of time.

 

And in which cases is the municipal capital gains tax NOT payable?

There are exceptional cases in which this payment is not made, and that is when the owner has sold at a loss, and these cases have to be proven.

In any case, the exemption from payment of the capital gains tax in Barcelona is described on the website of the Barcelona City Council.

 

From Withfor, ethical real estate in Barcelona, we know that the calculation of the capital gain when selling or inheriting a property can be a long process and with some difficulty, so we invite you to contact us so that everything goes in the best way.

We want each of our clients to feel safe and accompanied in the process of selling or renting their property. That’s why we are committed to you every step of the way and keep you informed. Do you have a property for sale or rent? We are here to help you.

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Real Estate News

How to sustainably renovate a house

The tap that leaks, the window that does not close properly, the balcony or the terrace we have wasted… Spending time at home has allowed us to detect small or big things that we would like to improve.

Doing renovations gives us great satisfaction as we give greater value to our home, where we spend a large part of our time, and we adapt it to our needs. But, what should we consider before starting a renovation?

A few years ago, the only criteria that were followed before starting a renovation were economic criteria and those related to the durability of the materials; today, another very important requirement comes into play: sustainability. When choosing the materials to work with, the ecological factor is key. It is important to look at their composition and opt for eco-friendly elements such as wood from sustainable forests, insufflated cellulose made from recycled paper, wood chip panels, resin, or cork, for example.

On the other hand, we can also take into account the origin of the materials and opt for locally sourced materials that have a much lower carbon footprint. Along the same lines, if we want a sustainable house, we should opt for refurbishing aspects that give us greater energy efficiency. Here are some tips:

Keep an eye on water consumption

  • Install flow restriction systems, such as aerators, which can reduce water consumption by up to 50%.
  • If you have to renew the toilet, opt for one with a double flush button and an efficient cistern.
  • If you can, opt for cold opening taps.

Improve thermal insulation  

Protecting your home from the cold and heat with adequate thermal insulation will allow you to save a lot of energy and will also save on heating and air conditioning costs.

  • Check that your windows are perfectly sealed.
  • Install double glazing, which improves insulation exponentially.
  • On entrance doors from the street, fit brush or rubber barriers in the bottom groove. They will help you maintain the temperature in your home, as well as keep out dust.

Other changes to make our home more sustainable  

  • If you need to change a household appliance, opt for class A appliances, as they are more energy efficient.
  • Replace incandescent or halogen bulbs with LED lights. They are more expensive, but in the long run they generate much greater savings.
  • If your home has a good solar orientation, make the most of natural light.
  • Solar panels and biomass boilers require a higher initial investment but end up being very cost-effective, as they allow you to produce your own energy.
  • If the walls need a new coat of paint, always opt for ecological paint, as they do not affect health and produce less waste.
  • Do you have an old ladder? Before throwing it away, think about whether you can reuse it and give it a second life as a shelf or decorative element – there are plenty of ideas on the internet! As well as being sustainable, you’ll have a great time being creative.
  • How can you make the most of that terrace? Try growing plants at home. An urban garden is a wonderful option that connects us with nature. You can also install water harvesting systems to make the most of it or generate compost that you can use as fertiliser, reusing vegetable waste and reducing your waste.

In Withfor we know that construction and environment are two concepts that are increasingly linked, and it is very positive that this is so. If we bet for ecological renovations, we help to the conservation of our environment, we are sustainable and efficient. This benefits the planet but also our health, wellbeing and allows us to save money.

An example of sustainability in construction are passive houses or passivhaus, a special type of construction whose function is to reduce energy consumption by up to 80-90%, as it uses a different design to the traditional one. If you want to know more about this type of home, see our article What are passive houses and how do they work?

Betting on ecological renovations and energy efficiency is easier than it seems and it means a good change for us and for the planet. At Withfor we are convinced of this and that is why we are committed to giving you alternatives to live healthier.

For more information, you can contact us or visit us in our Withfor House.

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Be ethical, live better

What are passive houses and how do they work?

Passive houses are one of the greatest architectural examples of bioclimatic and sustainable housing.

At Withfor, an ethical real estate agency based in Barcelona, one of our greatest commitments is sustainability, so we are going to tell you all about the construction of passive houses and what advantages they offer you and the environment.

 

What are they?

Traditional constructions seek to meet all comfort needs. However, it is not always possible to meet air conditioning needs for various reasons, and this is a problem that is now being tackled in homes for sale in Barcelona.

The lack of proper weatherproofing in the home means that when it is very cold, people will logically look to turn on the heating to be more comfortable. The same happens when it is hot: people will look for a cooling system.

In Passivhaus houses this does not happen because they are a special type of construction whose function is to reduce energy consumption by up to 80-90%, as they use a different design to the traditional one: the Passivhaus standard or norm.

This construction standard guarantees optimal conditions of comfort and indoor climate in the home, without the need to use conventional energy systems (heating, air conditioning, etc.), saving 15 kWh/sqm per year.

 

The Passivehaus concept

Wolfgang Feist was the founder of the Passivhaus Institute in the 1980s, and creator of the world’s first passive house in Darmstadt, Germany.

They are called “passive” because they are a very low-maintenance type of building. Thanks to the precision of their composition, they do not require much energy to weatherproof.

 

Types of biopassive houses

The difference between a traditionally built house and a passive house is not in the materials, but in the design.

The success of passive house design is that it makes the best possible use of the site’s conditions and makes the best possible use of the building materials.

This process optimisation is achieved by means of modular construction for maximum energy efficiency.

There are currently several companies in Spain that have developed architectural projects that follow the Passivhaus standard and have created a catalogue of passive houses.

The construction catalogue includes prefabricated passive houses based on the use of concrete and wood (most of them using PEFC or FSC certified wood). There are also many modular timber construction projects, or single-storey passive houses. Most of these constructions are smart and sustainable dwellings that include home automation systems for energy efficiency.

 

Characteristics of the Passivhaus standard

In order to obtain the Passive House building standard, some aspects are taken into account, which are evaluated by an official Passive Institute certifier.

  • Thermal insulation

The facades are designed with large openings facing the sun during winter to capture heat, while materials such as pergolas are added to protect from solar incidence in summer. The façades are then properly insulated with low transmittance thermal insulation to prevent energy leakage during winter and summer.

  • Thermal bridges

The design of passive houses seeks to avoid thermal bridges, which are the points of heat leakage (in winter). These are detected and repaired to optimise energy efficiency.

  • Airtightness

Through the design and the correct use of the building materials used, the aim is to provide a high level of airtightness for walls, doors and windows. This prevents the loss of heat or cold during the seasons of the year.

  • Quality doors and windows

Various resources are implemented such as: triple insulated windows with double glazing and air chambers. As for the carpentry, it should also be in a condition to be able to insulate properly.

  • Ventilation system

Passive houses have a 24/7 mechanical and continuous ventilation system. This system allows high-performance heat recovery. In this way, energy is recovered from the house itself and there is no need for traditional air-conditioning in the house.

 

Advantages of these construction models

  • Up to 90% energy savings.
  • Solving the problem of air-conditioning in the home.
  • Improve the quality of life.
  • Promote sustainable housing and the saving of biological resources.
  • Acoustic insulation.
  • Improve the cleanliness of the home by reducing dust, pollen and mite production.
  • Savings and economic profitability.

 

Prices of biopassive houses in Spain

According to various specialists, the construction of passive houses in Spain would represent an estimated cost overrun of between 5% and 15% over a traditional house.

The variation in price per square metre will depend on the construction model and the type of material used. And, of course, other conditions such as location, size of the building, etc. also play a role.

At Withfor, we are committed to sustainability, and we want our customers to be informed about ways to optimise energy resources in their homes to take care of our environment. We invite you to our Withfor House. We are here for whatever you need.