Everything You Need to Know About Municipal Capital Gains Tax
Learn how the Municipal Capital Gains Tax (IIVTNU) affects the sale of your properties. We explain the calculation methods, exemptions, and filing deadlines.
Methods for Calculating Municipal Capital Gains Tax
Following the 2021 reform, municipal capital gains tax is calculated using two methods:
- Objective method: It is based on the assessed value of the land multiplied by a coefficient that varies according to the number of years of ownership.
- Actual method: It is calculated based on the actual profit realized from the sale, using a ratio between the land value and the total property value.
The taxpayer may choose the method that is most advantageous to them.
Exemptions from Municipal Capital Gains Tax
It is important to know that you do not have to pay the municipal capital gains tax if there is no actual profit on the sale of the property. This means that if the sale price is lower than the purchase price, you will be exempt from this tax.
Calculation of the land-to-building ratio
To apply the actual method, you need to calculate the ratio between the land value and the total property value. This calculation is performed as follows:
- Land value: Cadastral value of the land.
- Total value: The sum of the assessed value of the land and the assessed value of the building.
The ratio is calculated by dividing the land value by the total value.
Deadlines and Filing of Municipal Capital Gains Tax
The tax must be filed and paid within 30 days of the sale of the property. The return is filed with the relevant city hall, where you must submit the necessary documentation for calculating the municipal capital gains tax.
