Anyone who inherits a flat in Spain, or receives one as a gift, tends to focus on inheritance and gift tax, and for good reason: it can move the most money, and its rules change from one region to another. But a second tax arises on the same day, on the same property, and is filed at a different office: the plusvalía municipal, the town hall's tax on the increase in value of urban land. It is the one people forget, because nobody collects it at the notary's office and because its deadline matches no calendar the heir has in mind.
This guide does not repeat how the two calculation methods work or how to reclaim tax paid in excess; each has its own guide. It covers what changes when the property is not sold but inherited or given away.
A different tax, paid to a different authority
Spanish inheritance and gift tax (Impuesto sobre Sucesiones y Donaciones, filed on Modelo 650 for an inheritance and Modelo 651 for a gift) is a State tax whose management has been handed to the regions. It is filed with the relevant autonomous community, or with the central State in some cross-border cases, and each region sets its own allowances and reliefs. The plusvalía municipal is a local tax, governed by the consolidated Local Government Finance Act, and it is declared and paid to the town hall of the municipality where the property stands. Neither replaces the other, and paying one does not cover the other.
One name causes confusion. In Spanish income tax, people sometimes speak of "the dead person's gain" to mean that death does not trigger a taxable capital gain for the deceased: that gain is not taxed. None of that applies here. The plusvalía municipal is due on an inheritance, because what it taxes is the increase in value of urban land revealed by a transfer, and a transfer on death is still a transfer.
Who the taxpayer is
When property passes without payment, the law places the tax on whoever acquires it. That is the opposite of a sale, where the taxpayer is the seller.
| Transaction | Who pays | Who else must notify the town hall |
|---|---|---|
| Inheritance | The heir, or the legatee if the property was left as a specific bequest | Only the person acquiring |
| Gift | The donee, the person receiving it | The donor as well: the law requires the donor to notify the transfer within the same deadlines |
| Life interest and bare ownership | Each person, for the right they receive | As for the inheritance or gift in question |
A split into life interest and bare ownership is common when the surviving spouse receives the life interest (usufructo) and the children the bare ownership (nuda propiedad). Each one's tax base is then the share of the land value that their right represents, worked out under the rules of the Spanish transfer tax.
When several people inherit, each is a taxpayer for their own share. There is no single joint bill that any of them can settle: there are as many tax charges as heirs, and each carries its own local relief, if any, depending on that heir's relationship to the deceased. It is common in one and the same estate for a child to qualify for relief and a nephew not to.
The deadlines that apply here
The tax falls due on the date of the transfer. In an inheritance, that date is the date of death, not the date the heirs accept or sign the deed dividing the estate; in a gift, it is the date of the deed that formalises it.
| Transaction | Deadline to declare or self-assess |
|---|---|
| Inheritance | Six months from the death, extendable to one year if the taxpayer applies within those six months |
| Gift | Thirty working days from the date of the gift |
The extension for an inheritance is neither automatic nor available once the deadline has passed: it is an application that must be lodged with the town hall before the six months run out. Nor does it follow from an extension granted for inheritance tax, which is a separate procedure before a separate authority. If dividing the estate will take time, the sensible course is to ask for both.
The deadline for a gift is the one most often missed. Thirty working days run out in little more than a calendar month, and the deed of gift carries no municipal payment with it: the notary reports to the town hall, but the tax still has to be declared separately.
Where the period starts
The tax measures the growth in land value during the time the land belonged to the person passing it on. In an inheritance or a gift, that person is the deceased or the donor, so the starting point is the date they acquired it, not the heir's or the donee's.
- If a father bought the flat in 1998 and dies in 2026, the period runs from 1998 to 2026. Under the objective method the scale stops at twenty years, so longer periods fall into the top band.
- If the deceased had in turn inherited it, the starting point is that earlier death, and the acquisition value is the one declared at the time for inheritance tax.
- If the deceased held the property in parts acquired at different times (half bought years ago, the other half inherited from a spouse who died first), each part has its own date and its own period, and they are calculated separately.
In practice this means you need the deceased's or the donor's title deed. In an inheritance the heir rarely has it to hand, and it is worth asking for it at the outset: without it there is no way to work out the period or run the comparison under the actual-gain method.
It also has a knock-on effect. For the heir, the acquisition date and value are now fixed by this inheritance. When the heir eventually sells, that plusvalía will run from the date of death and start from the value declared for inheritance tax.
The two methods, applied to an inheritance
Since judgment 182/2021 of the Tribunal Constitucional, the Spanish Constitutional Court, and Royal Decree-law 26/2021, the tax base can be worked out under the objective method or the actual-gain method, and the taxpayer is entitled to whichever gives the lower figure. That holds for an inheritance or a gift just as for a sale. What changes is where the figures for the actual-gain method come from:
| Figure | Source when property passes without payment |
|---|---|
| Transfer value | The value declared for inheritance and gift tax, or the value checked by the tax authority if higher |
| Acquisition value | The one in the deceased's or donor's title: their purchase deed or, if they too received it without payment, the value declared at that time |
Bear in mind that since 2022 a property generally cannot be declared for inheritance and gift tax below its reference value (valor de referencia) published by the Catastro, the Spanish land registry office. That figure is usually what ends up as the transfer value for the plusvalía, even when the heir thinks the flat is worth less. The workings of each method are set out in the guide to the two methods, and where the land figure comes from in the guide to land value on the IBI bill (the IBI being the annual council tax on property).
A mother bought a flat in 2012 for 120,000 euros. She dies in 2026 and her daughter inherits it; for inheritance tax it is declared at 160,000. Land accounts for 40 % of the valor catastral, and the valor catastral of the land is 28,000 euros. The coefficient and the rate below are invented for the example: the real ones are in the town hall's bylaw.
Actual-gain method: (160,000 − 120,000) × 40 % = a base of 16,000 euros. Objective method, with an invented coefficient of 0.45: 28,000 × 0.45 = a base of 12,600 euros. The lower one applies, 12,600, and an invented rate of 25 % on it gives a tax of 3,150 euros. If the bylaw grants relief to this daughter, it is applied afterwards, to that amount.
When there is no increase
If the value declared for inheritance tax does not exceed what the deceased paid, there is no increase and the transfer is not taxable. This happens more often than people expect with properties bought in the years before the 2008 price fall and inherited later. But non-liability does not apply by itself: it must be declared within the same deadline, with the deceased's title deed and the regional tax return showing the declared value. How to set it out is in the guide to when no plusvalía is due.
Local relief on inheritances
The law allows town halls to provide in their bylaw for relief on the tax due on transfers on death in favour of descendants and adopted children, spouses, and ascendants and adoptive parents. It is optional: a town hall may grant it or not, and if it does, it sets the percentage and the conditions within the statutory ceiling.
In practice, many bylaws limit it to the deceased's main home, while others scale it by the valor catastral of the land or add conditions, such as the heir having lived with the deceased, keeping the property for a number of years, or applying for it within the filing deadline. That is why we publish no percentages: two neighbouring towns can range from nothing to very generous relief, and the only reliable source is each town hall's own tax bylaw in force on the date of death, which is the first thing we check in every case.
Some reliefs are lost if the heir sells before a set period, and the town hall then claims the difference. Before selling an inherited flat, reread the bylaw that applied to the inheritance, not the one in force on the day of the sale.
The trap in a gift from parents to children
In several Spanish regions a gift from parents to children enjoys such generous relief under gift tax that the bill comes out close to zero, and families often leave the notary's office convinced the transaction has cost them nothing. It has not, for two reasons.
- The plusvalía municipal is paid in full. The relief the law lets town halls grant is for transfers on death; a gift does not qualify, and the regional relief under gift tax has no effect on the municipal tax. The child pays the plusvalía for a period that may be very long.
- The parent may have a gain for income tax. Unlike an inheritance, a gift of property does produce a capital gain or loss for the donor, in which the transfer value is the one that results from the gift tax rules.
That is three taxes on one transaction, and only one of them is relieved. So the question of whether to give during your lifetime or wait for the inheritance cannot be answered by looking at the regional tax alone; it is set out in the comparison between giving now and leaving it in your estate, and the regional side in our page on inheritance and gift tax.
If the heir does not live in Spain
The heir's residence does not change who pays: it is still the heir. When a non-resident sells, the law makes the buyer answer for the seller's plusvalía as a substitute taxpayer, but that mechanism does not exist for inheritances or gifts. An heir living abroad is the taxpayer directly, with the same deadlines, and what is usually missing is practical: a NIE (the Spanish tax identification number for foreigners), someone to file on their behalf, and a way to pay a town hall that does not always accept payments from abroad.
Two more points. If the bylaw makes relief conditional on having lived with the deceased or being on the local register of residents, an heir who lives abroad may not meet it, and the bylaw has to be read before counting on the relief. And inheritance tax for a non-resident has its own rules on which authority is competent, explained in the guide to cross-border inheritances and gifts. When that heir later sells, the buyer-as-substitute rule does come into play, together with the 3 % withholding on Modelo 211.
Self-assessment or declaration
The law lets each town hall choose. Some have introduced self-assessment: the heir or donee works out the tax, pays it and files the municipal form. Others work by declaration: you file the documents and the town hall calculates the tax and notifies you of the assessment. This is not a formality, because it decides how an error is corrected later: a self-assessment is amended, whereas an assessment by the town hall is appealed within a short period from notification, as explained in how to reclaim an overpaid plusvalía.
For an inheritance, the documents asked for are much the same in almost every town:
- The death certificate and the certificate from the Spanish register of wills.
- The will, or the court or notarial declaration naming the heirs where there is no will, and the deed of acceptance if it has already been signed.
- The deceased's title deed.
- The latest IBI bill, with the cadastral reference.
- The inheritance tax return showing the declared value.
- If relief is claimed, whatever the bylaw requires to prove its conditions.
If the estate has not been divided after six months, there is no need to wait for it: either apply for the extension in time, or declare with what you have and complete it later. What you should not do is let the deadline pass, because that brings late-filing surcharges or, if the town hall moves first, an assessment issued on its own initiative under the objective method.
What we do with your plusvalía
With the deceased's or donor's title deed, the latest IBI bill and the value declared for the regional tax, we can check whether there was any increase, work out both bases, review the town hall's bylaw to see whether relief is available and on what terms, and file within the right deadline for each heir or donee. The starting point is the plusvalía municipal form, and the rest of this service is on our plusvalía municipal page. We analyse and present every case with care, but what a town hall decides is not in our hands and we do not guarantee it.