Javier Ortega is selling a flat in Sevilla in September 2026 that he bought in 2018 for 240,000 €. The buyer pays 262,000 €. At the notary's office he is told that the plusvalía municipal, the local tax on the increase in value of urban land, "comes to about 3,000 euros", worked out with the council's online simulator. A friend tells him there is another way of calculating it that would mean paying less. He is half right: there are two methods, you are taxed under the one that gives the lower base, but the second one is not applied unless somebody asks for it and supports it with documents.
Two formulas to measure the same thing
Since Royal Decree-law 26/2021, article 107 of the consolidated text of the Local Government Finance Act (TRLRHL) offers two ways of measuring the increase in value of the land.
Objective method. This is the one the council applies by default. The taxable base is the cadastral value of the land on the date of the sale (the official value given by the Cadastre, Spain's property register for tax purposes) multiplied by a coefficient that depends on the years of ownership. Each council sets its coefficients in its ordenanza fiscal, the local tax bylaw, without exceeding the maximums laid down by law, which are updated by a rule with the rank of an Act, usually the budget Act. It does not look at either the purchase price or the sale price.
Actual method. This is the difference between the value of the land at the sale and at the purchase, with the same rules used to check whether there is any increase at all: the higher of the value in the deed and the value checked by the authorities, no costs or taxes, and the cadastral land proportion applied to both prices. Article 107.5 says that when, at the request of the taxpayer, it is shown that this increase is lower than the objective base, the actual increase is taken as the base.
The tax due comes from applying to the base the rate in the bylaw, which is the same under both methods. That is why comparing bases is enough: the lower base gives the lower tax.
Javier's comparison, step by step
The 2026 bill for the IBI (the annual council property tax) shows a total cadastral value of 118,000 € and a land value of 53,100 €, that is, 45 %. Javier bought in 2018 and is selling in 2026: eight full years, without counting fractions.
- Objective method: the council multiplies 53,100 € by its coefficient for eight years. The base the simulator gives him is 10,089 €.
- Actual method, value of the land at the sale: 262,000 × 0.45 = 117,900 €.
- Actual method, value of the land at the purchase: 240,000 × 0.45 = 108,000 €.
- Actual increase: 117,900 − 108,000 = 9,900 €.
- Base that applies: the lower one, 9,900 €.
The difference is small in this case, 189 € of base. The rate is applied to that difference, so the saving in tax is small as well. If Javier had sold for 250,000 €, the actual increase would have been 4,500 € and the objective base would still be 10,089 €: the actual method would cut the tax to less than half.
What tips the balance towards each method
There is no method that is better in general. It depends on three variables: the years of ownership, how much the price has risen, and the weight of the cadastral value compared with the market value.
| Situation | Ownership | Purchase → sale | Objective base (simulator figure) | Actual increase in land (45 %) | Better option |
|---|---|---|---|---|---|
| Javier | 8 years | 240,000 → 262,000 € | 10,089 € | 9,900 € | Actual, narrowly |
| Flat market | 5 years | 200,000 → 205,000 € | 9,400 € | 2,250 € | Actual, clearly |
| Old purchase | 28 years | 60,000 → 260,000 € | 21,240 € | 90,000 € | Objective |
| Quick sale | 7 months | 180,000 → 196,000 € | 3,980 € | 7,200 € | Objective |
The objective bases in the table are figures for each case, not the coefficients of any particular municipality. What the table shows is the pattern:
- Long ownership with a large rise in value favours the objective method. The law caps the period over which the gain is generated at twenty years, and the coefficient, even if it is the highest on the scale, is applied to the cadastral value, which is usually below market value. The actual increase, by contrast, captures the whole rise.
- Flat markets or sales with little gain favour the actual method, because the objective method keeps applying its coefficient even if the price has barely moved.
- Sales within less than a year are taxed too. Article 107.4 prorates the annual coefficient by complete months. If the price rose sharply in those months, the objective method usually comes out lower.
- A high cadastral value relative to market value makes the objective method more expensive and makes it more likely that the actual method comes out below it.
The actual method is not applied automatically
Article 107.5 speaks of "at the request of the taxpayer". If Javier files nothing, the council will assess the tax by the objective method, because it is the only one it can calculate with the data it receives. For the actual method to apply, you have to declare it and provide the purchase and sale deeds, just as you do to prove that there was no increase at all.
When the council requires a self-assessment, the taxpayer does the sum and chooses. Article 110.4 allows the council to check the values declared for the purposes of the actual method, but not to attribute bases different from those that result from applying the rules correctly. When the system is one of a declaration followed by an assessment issued by the council, the request must appear in the declaration, with the sum done and the deeds attached.
You can send us the two deeds and the latest IBI bill through the plusvalía form. With those three documents both calculations can be done.
The law provides for the maximum coefficients to be updated every year. In January 2025 and in January 2026 the Spanish Parliament repealed the royal decree-laws that amended them, and those updates were left without effect according to the notes to the consolidated text in the BOE, the Official State Gazette. Before relying on a simulator, check which table was in force on the date of the deed and which coefficients the bylaw in force at that time contains. If the bylaw exceeds the new legal maximum, the maximum applies directly.
Costs do not come into either method
A common mistake is to add the notary, the land registry, transfer tax or the agency's commission to the purchase price in order to reduce the actual increase. Article 104.5, to which article 107.5 refers, expressly rules this out: the values are taken "without any expenses or taxes levied on those transactions being taken into account for these purposes". Nor is there any adjustment for inflation. For IRPF (Spanish personal income tax) the costs are added, and that is why the income tax gain and the plusvalía increase almost never match. The guide on the gain when you sell explains that other calculation.
When there is no increase, there is no choice to make
If the actual method gives zero or a negative figure, the question is no longer which base is lower: there is no tax. That situation has its own procedure and we deal with it in I sold at a loss. And if the land percentage on the bill looks odd to you, before comparing methods it is worth reviewing how the value of the land is worked out, because that figure moves the result of the actual method in direct proportion.
When you discover the actual method after paying
If Javier pays under the objective method and months later realises that the actual method was lower, the solution depends on how he paid. A self-assessment can be corrected within the limitation period; an assessment notified by the council can be appealed within one month, and once that month has passed it becomes final. In neither case can we guarantee the result, because the council will review the values. The guide on the two methods of calculation has more examples, and the way to claim is set out in getting back a plusvalía already paid.
The Salama Tax page devoted to the municipal plusvalía brings together both methods and the documents each one requires.