The Tax on the Increase in the Value of Urban Land (IIVTNU), also known as Municipal Capital Gains, is applied when a home or other urban real estate is sold, donated or inherited. It is exclusive to the municipalities, of a direct, objective, real nature, of instant accrual and whose management also corresponds exclusively to the town councils. Its application taxes the revaluation of the asset from when it was purchased until its sale, donation or inheritance.
After various court rulings, the Supreme Court ruled in 2018 that anyone who proves that they sold their home at a loss should not pay this tax. Based on this ruling, the capital gain should only be paid when a profit is actually obtained, which means that the sale price of the home is higher than the purchase price.
What happens to Municipal Capital Gains in an Inheritance?
When a person dies and leaves a home or other property as an inheritance, in addition to the Inheritance and Donation Tax, the Municipal Capital Gains must also be paid. In both cases, the deadline to pay taxes will be 6 months from the date of death.
In which cases is it possible to claim payment of Municipal Capital Gains due to inheritance?
As occurs in inter vivos transfers, a refund of the amount paid as Capital Gain may be claimed if a loss has been obtained with the transfer. The period to request it is 4 years if self-assessment has been carried out through a Request for Rectification and Refund of Undue Income or within a period of one month if it is the City Council that has issued the liquidation through a Resource for Replacement or Economic Claim -Administrative.
To prove the loss, it will be necessary to have the valuation of the property at the time of the death of the deceased. From our law firm in Murcia capital, we always recommend paying and later claiming to avoid possible surcharges, late payment interest and penalties from the City Council.
Prescription of Municipal Capital Gains due to inheritance
The period of prescription of the Municipal capital gains due to inheritance It is 4 years from the day following the day on which the deadline for submitting the corresponding declaration or self-assessment ends or from the day after the payment term ends in the voluntary period.
