Tax on sale of Villa

Hi Maureen,

"Plusvalia" is a municipal tax, payable to your Ayuntamiento, based on the increase in value of the land on which your property is built.  It´s calculated on the rateable value of your property and the number of years that have passed since you bought it, so you´re correct, long-term owners who sell can end up with large bills.  The lawyer acting for your sale should have advised you of it.

Kind regards,

Kim

We got hit with this when we moved about 5 years ago.  Cost us 516 euro and we sold the villa for less than we paid for it!  Just a way the local council can raise extra money - one of the joys of living here I suppose, though it it very annoying.  Our solicitor did say we could expect it though.

You are correct in the local council raising funding as part of the Plusvalia tax objectives is the increase in value in some of which is due to the improvements to the area.

We have moved back to the uk living in Spain is not all its cracked up to be. Its amazing all these hiden costs. When we where deciding to go and live there we where told the cost of living was lower than the uk and the suma was low compared to uk rates. I would have preferred it higher and no supprises when you sell. The only thing that is cheap out there is booze and cigarettes and they are not good long term.

They would be better including it in the suma and you wouldn't get any nasty supprises when you sell. This must be the reason for so many empty derelict villas around. They are worthless when you have such high taxes to pay. We learnt the hard way thinking the grass was greener and it was a high price to pay for a bit of sunshine and most of the time it was to hot to enjoy.

Your statement, We learnt the hard way is so true in many cases, I am still learning! But I have made my bed here and Spain is now my home and have have no reason to return to the UK, I agree that Spain is not a bed of roses and general living cost is not as cheap as I was led to believe, Most property built in Spain would be classed as Non standard construction in the UK, yes there are a lot of unknown taxes, but then again there are a lot of stelf taxes in the UK, I would like to add, If only I knew then, What I know now, I wish you all the very best and stay safe and healthy. Living the dream, let’s watch some more TV programs!!!!

I agree, Peter, I think programmes like 'A Place in the Sun' have a lot to answer for - people get better advice on this forum than they do on shows like that!  When did anyone ever hear of Plusvalia, Complementary Tax or Non-resident Tax on 'APITS' or their ilk?

I'm always impressed by people who, prior to moving, ask for information such as budgeting.  I appreciate it's relative to what we were used to in the UK and, personally, to go from almost £3k UK Council Tax to only €365 IBI (which hasn't increased in 5 years!) was a big difference which more than covered our private health insurance and the higher electricity costs here in Spain, but I always advise that what I call "set up" costs, beyond property purchase costs, can be surprisingly expensive.

Brexit has changed things dramatically and we're lucky to have quite a few members who are already going through the NLV process and sharing their knowledge and experience with us. Beyond the new residency process, those set up costs, including taxes, will continue as before, so it's still important for us share such information.

Kind regards, 

Kim

Thank you for your reply. If we had never gone we would have kept saying we should have done it when we had the chance. Everyone is different and most people enjoy living there.

Take care and stay safe

Keep up the good work its true what you say the tv programmes don't prepare people enough for what they are letting them selves in for. People need to look into it more we thought we did but we never thought we would sell up and come home. I must say though that plusvalia tax came as a shock and for it to be so much after only 2 and a half years and why should we pay for improvements in the area when we no longer live there.