Daniel Ferrer inherited his father's flat in Castellón (Castelló de la Plana) in November 2023. His father had bought it in 1994. Daniel paid the plusvalía municipal (the local tax on the increase in value of urban land) on the inheritance and Inheritance Tax, for which he declared a value of 180,000 €. Now, in September 2026, he is selling it for 205,000 €. At the notary's office he is warned that he will have to pay another plusvalía. His question is a reasonable one: if he paid for the increase in value of the land less than three years ago, why is he paying again?
Two taxable events, two periods that do not overlap
The municipal plusvalía falls due every time ownership of the land is transferred, under article 109.1 of the consolidated text of the Local Government Finance Act (TRLRHL), whether by inheritance, gift or sale. Each taxable event measures the increase over a specific period: from the previous acquisition to the transfer.
| Transfer | Taxpayer | Period measured | Years |
|---|---|---|---|
| Inheritance (November 2023) | Daniel, as heir (art. 106.1.a) | From the father's purchase in 1994 to the death | 29, but the law counts a maximum of 20 |
| Sale (September 2026) | Daniel, as seller (art. 106.1.b) | From the death to the sale | 2 complete years |
The same gain is not taxed twice. The first plusvalía covered the increase built up while the flat belonged to his father; the second covers the increase that has taken place while it has belonged to Daniel. The feeling of paying twice comes from the fact that both are paid by the same person within a short time.
Article 107.4 counts complete years, without fractions. From November 2023 to September 2026 there are two complete years and ten months: the coefficient is the one for two years. If Daniel sold before a year had passed since the death, the sale would also be taxed, with the annual coefficient prorated by complete months.
The date that counts is the date of death
Many heirs believe that their period begins with the deed of acceptance of the inheritance, which is sometimes signed months or years after the death. It does not: the tax on the inheritance fell due on the date of death, and that is the acquisition date for the next transfer. If Daniel had signed the acceptance in 2025, his period for the sale would still start in November 2023.
Daniel's figures, step by step
The 2026 bill for the IBI (the annual council property tax) gives a cadastral value of the land (the official value set by the Cadastre, Spain's property register for tax purposes) of 46,000 € and a proportion of 40 % of the total.
- Objective method: the council applies its two-year coefficient to the cadastral land value. The resulting base is 6,440 €.
- Actual method, value of the land at the sale: 205,000 × 0.40 = 82,000 €.
- Actual method, value of the land at acquisition: as it was an inheritance, article 104.5 requires the value declared for Inheritance Tax to be used, or the value checked by the authorities if that is higher: 180,000 × 0.40 = 72,000 €.
- Actual increase: 82,000 − 72,000 = 10,000 €.
- The lower base is the objective one, 6,440 €. In this case, the method the council applies by default is the one that suits Daniel.
If Daniel had declared a value of 200,000 € for Inheritance Tax, the actual increase would be 2,000 € and the comparison would be reversed. The value declared on inheriting shapes the plusvalía on the later sale.
Declaring a low value on inheriting reduces Inheritance Tax, but it increases the actual increase for the plusvalía on the sale and, above all, the gain for IRPF (Spanish personal income tax). Declaring a high value does the opposite. There is no neutral choice, and the authorities can check the value at both moments. It is worth doing the full calculation before filing Inheritance Tax, not afterwards.
What is taken into account: the income tax on the sale
Where the earlier inheritance does count is in Daniel's income tax. His capital gain is calculated with the rules in articles 35 and 36 of the IRPF Law:
- the acquisition value is the one that results from the Inheritance Tax rules, without exceeding market value;
- the costs and taxes inherent in the acquisition paid by the heir are added to that value, such as the municipal plusvalía on the inheritance and the notary and land registry fees for the allocation;
- the costs and taxes inherent in the sale paid by the seller are subtracted from the sale price, including the municipal plusvalía on the sale.
With example figures for Daniel:
- Sale price: 205,000 €.
- Less sale costs (agency and notary paid by him): 5,200 €.
- Less municipal plusvalía on the sale: 1,600 €.
- Transfer value: 198,200 €.
- Acquisition value: 180,000 € plus the 900 € plusvalía on the inheritance and 750 € of notary and registry fees: 181,650 €.
- Capital gain: 198,200 − 181,650 = 16,550 €.
Both municipal plusvalías reduce the gain: the first by being added to the cost, the second by being subtracted from the price. In that sense, what was paid to the council is not lost for income tax purposes. The guide on the gain when you sell explains the other adjustments.
The increase built up while the flat belonged to the father is not taxed in anyone's income tax. Article 33.3.b) of the Act treats as no gain arising on transfers for no consideration on the death of the taxpayer. For that rise in value from 1994 to 2023, only the municipal plusvalía on the inheritance was paid; Inheritance Tax taxes the value inherited, not the gain.
If you inherited with others and you sell together
When several brothers and sisters inherit and sell at the same time, each is a taxpayer for their share in both plusvalías. If one of them later buys the others' share, that sale between siblings is one more transfer for consideration, with its own plusvalía for the sellers. And if the estate is divided by allocating the flat to one of them in exchange for money to the others, you have to look at whether there is an excess allocation, because it changes who is taxed and why. We deal with cases with several heirs in who pays the plusvalía on an inheritance.
What documents to gather before signing the sale
- The deed of acceptance and allocation of the inheritance.
- The Inheritance Tax self-assessment with the value declared and, if there was one, the check on value.
- Proof of the plusvalía paid on inheriting.
- The latest IBI bill.
- Invoices for the notary, registry and agency for both transactions.
You can send them with the plusvalía form so that the plusvalía on the sale can be calculated with both methods at the same time as the income tax gain. If you live outside Spain, the gain is calculated on Modelo 210, the non-resident income tax return, with the same rules, and the municipal plusvalía does not change; if the buyer acts as substitute taxpayer, we explain it in the seller does not live in Spain.
The guide on valuing assets in an inheritance helps you understand the value declared on inheriting, which is the piece that links the two plusvalías.
The Salama Tax page on the municipal plusvalía explains the calculation in each transfer and how the dates chain together when a property changes hands several times.