Where taxpayers get caught out
When a non-resident seller does not pay the plusvalía, the town hall can pursue the buyer. Buyers' lawyers normally retain the amount at completion for that reason.
The two calculation methods
| Method | How it works |
|---|---|
| Objective | Cadastral value of the land × coefficient for the years owned × municipal rate |
| Real gain | Sale price minus purchase price, proportioned to the land, × municipal rate |
| Which applies | The taxpayer can choose the lower of the two |
Who pays
In a sale, the seller is the taxpayer, but if the seller is a non-resident, the buyer is liable as a substitute. That is why the amount is usually withheld from the price. In an inheritance or gift the heir or recipient pays.
No gain, no tax
Since the Constitutional Court rulings and the 2021 reform, if you can prove that the sale price was not higher than the purchase price, no plusvalía is due. The deeds of both transactions are the evidence.
Deadlines and municipalities
Each municipality sets its own rate within legal limits and has its own procedure: Palma, Calvià, Eivissa, Ciutadella and Maó differ. The return is usually filed within 30 working days of a sale and six months of a death.
Relationship with other taxes
The plusvalía paid is a deductible selling cost for capital gains tax. See capital gains tax for non-residents, IBI, inheritance tax and our property tax service.
An illustrative example
Based on situations we commonly see; not a specific client. A seller in Ibiza had owned a flat for four years with a modest gain. The town hall's objective calculation gave a high plusvalía; calculated on the real gain it was less than half. We filed choosing the real-gain method and the town hall accepted it.
How Castell.tax can help
We handle the taxes of buying, owning, renting and selling property in Mallorca, Ibiza, Menorca and Formentera: purchase taxes, IBI and the cadastre, rental returns, plusvalía and capital gains. We coordinate with your lawyer and notary so the figures are right before you sign. See our property tax service or contact us in English or German.
This page is published by Castell.tax, the tax practice of Castell.law in Palma de Mallorca. It is general information; tax rules and rates change, so check your case with us before filing.
Not sure what you owe? Ask before the deadline
Send us your situation or the letter you received. A tax adviser will tell you what applies, what it could cost and what to file.
Frequently asked questions
Who pays the plusvalía on a sale?
The seller, although the buyer is liable if the seller is non-resident.
Is plusvalía due if I sold at a loss?
No, without a real gain no tax is due.
Can I choose the method?
Yes, the taxpayer can apply the method that gives the lower amount.
Is it deductible?
Yes, as a selling cost for capital gains tax.