How to calculate the new Municipal Capital Gain in Barcelona

In one of our last articles, we talked to you about the changes in the calculation method for the IIVTNU (Tax on the Increase in Value of Urban Land). Today we want to go a little deeper and explain how you can calculate the new Municipal Capital Gain in Barcelona.

After Royal Decree-Law 26/2021, of November 8, was approved by the Council of Ministers, two ways to calculate the Capital Gain have emerged. Which one you need depends on whether you are going to sell, donate or inherit a home.

What must be taken into account before doing the calculation?

• The properties your possess which have not experienced an increase in value between the acquisition and transmission price, will be exempt from the payment of said tax.
• It will be the taxpayer who decides the calculation method that benefits him the most

Calculate Capital Gain with the objective method

To calculate the Municipal Capital Gain in Barcelona with the objective method, two values must be taken into account: the tax base and the tax rate set by the city council.

Step 1: Calculate the tax base

The tax base is calculated by applying the multiplication coefficient (see table), based on the years elapsed between transmission and acquisition, to the cadastral value of the land.

Step 2: Apply the tax rate

We apply the tax rate set by the Barcelona City Council to the result of the tax base, that is, 30%.

First example

Home bought 5 years ago in Barcelona.

Cadastral value of the land: € 300,000.

Calculation of the tax base: € 300,000 x 0.17 = € 51,000

Tax rate: € 51,000 x 30% = € 15,300.

The tax fee will be € 15,300.

Calculate the new capital gain with the real method

Step 1: Calculate the capital gain obtained with the transaction. To do this, the acquisition price will have to be subtracted from the transmission price.

Step 2: Calculate the tax base. It will be necessary to multiply the capital gain (step 1) by the percentage that refers to the cadastral value of the land over the total cadastral value of the property.

Step 3: Apply the tax rate of the Barcelona City Council, that is, 30%.

Second example

Home bought in Barcelona for 200.000€.

Home sold 5 years later for 300.000€.

Capital Gain: 100.000€.

Assumption of the percentage that represents the cadastral value of the land: 45%.

Tax base: 45.000€

Tax rate: 45.000€ x 30% = 13.500€

The tax rate will be 13.500€

In the previous examples, it would benefit the taxpayer to choose the real method. They would save € 1,800.

If you plan to sell an apartment in Barcelona in 2022 and you want to know how much you will have to pay for Municipal Capital Gain, do not hesitate to contact our real estate agency.

We encourage you to discover all the services that we put at your fingertips, to successfully sell a home, here.