What is the plusvalía municipal (IIVTNU)?
The plusvalía municipal — formally IIVTNU (Impuesto sobre el Incremento de Valor de los Terrenos de Naturaleza Urbana) — is a local tax on the increase in value of urban land when you transfer it (sale, inheritance, gift). It is collected by the town hall, not the AEAT, and since the November 2021 reform you may choose between two calculation methods.
The legal framework is the consolidated Local Finances Law (RDLeg 2/2004), arts. 104-110. For years the tax was computed under a single objective formula that allowed no proof that no real increase had occurred. The Constitutional Court struck those rules down in STC 182/2021 (26-10-2021), as they contradicted the principle of taxation by economic capacity. There was a short legal limbo until the Government passed Royal Decree-Law 26/2021 that rewrote the rules.
Since that reform, the taxpayer may choose between two methods and apply the one yielding the lower tax: the objective method (multiplies the cadastral land value at the moment of transfer by a coefficient set by the town hall based on years of holding), or the real method (the difference between transfer price and acquisition price, multiplied by the ratio of cadastral land value to total cadastral value). On top of that, if there is no real increase in value, no tax is owed — but you must prove it documentarily (purchase and sale deeds).
The taxpayer depends on the operation. In a sale: the seller (transferor) pays. In inheritance or gift: the recipient (heir or donee) pays. The deadline is: 30 business days from the inter vivos transfer (sale, gift), 6 months extendable to 1 year from death in the case of inheritance. You file with the town hall — most have an online form with a calculator, otherwise on paper.
For a non-resident host selling a property in Spain, the plusvalía municipal comes on top of the IRNR (Modelo 210 for capital gain), but they are two separate taxes: the IRNR taxes the full capital gain at 19% (EU/EEA) or 24% (rest); the plusvalía municipal taxes only the land portion and is collected by the town hall. Important: there is a 3% withholding mechanism on the sale price for non-residents (Modelo 211) that covers the IRNR but not the plusvalía municipal — you have to settle that one separately. Miss it, and the town hall can come after you with surcharges years later.
Why it matters
Many people confuse the plusvalía municipal with the IRPF/IRNR capital-gains tax — they are two taxes on the same sale. The town hall doesn't talk to the AEAT or vice versa, so people pay one and forget the other. If you sell and think Modelo 211/210 wraps everything up, remember: the plusvalía municipal has its own deadline (30 business days), its own counter (town hall, not Hacienda), and can be a serious figure in big municipalities. And always check whether the real method gives you a lower bill — since 2021 you can choose it by presenting the deeds.