The seller pays, unless otherwise agreed
The tax on the increase in value of urban land, which everyone calls the plusvalía municipal, is paid by law by the seller. It is not the same as the capital gain in income tax (IRPF): they are two different taxes on the same transaction.
The parties can agree otherwise in the contract and that is valid between them, but the town hall will still claim it from the seller: the agreement does not change who is liable towards the authority. That is why, if it is agreed, it should be made very clear, with the estimated amount in front of you.
In an inheritance or a gift, on the other hand, it is paid by the recipient.
Since 2021 there are two ways to calculate it
In 2021 the Constitutional Court struck down the method for calculating this tax, and the rule that followed left two methods. The taxpayer can apply whichever is cheaper.
The objective method starts from the cadastral value of the land and applies a coefficient depending on how many years the property has been owned. It is the quick calculation and the one the town hall uses by default.
The actual method compares what it cost to acquire with what it was sold for, and taxes the difference attributable to the land. When the home was bought at a high price and is sold for less, or the increase has been small, this method comes out far below the other.
Choosing wrongly costs money, and the town hall does not tell you which one suits you.
Further reading: what taxes you pay when buying a home and what to check before buying a home in Madrid.
When there is nothing to pay
Questions about plusvalía
How long do I have to file it?
It depends on the town hall and whether the municipality uses self-assessment or assessment by the authority. In a sale the deadline is short, a matter of weeks, and starts from the date of the deed.
Can I claim back what I overpaid?
Depending on how it was paid and how much time has passed, there are different routes and not all of them are still open. It is one of those things worth looking at the same day it comes up, not next month.
What if I inherit a home and sell it straight away?
They are two different taxable events: the inheritance and the subsequent sale. Each with its own deadline and calculation.
Can you calculate it for me?
Yes. With both deeds and the IBI receipt, both methods are calculated to see which one suits you, before anything is filed.