Plusvalía Tax in Málaga and Marbella: Inheritance, Rebates, and How to Calculate It

What is Plusvalía Tax and Who Pays It in an Inheritance in Malaga and Marbella?

Plusvalía tax is levied on the increase in the value of the land where an urban property is located. In an inheritance, the liable parties (those who must pay the tax) are the heirs who receive the property. This means if you inherit a house or apartment, you are responsible for paying this tax to the corresponding city council (Málaga, Marbella, etc.).

Important: If the property is inherited by multiple people, each heir pays their proportional share. If you renounce the inheritance, you don't have to pay anything because no transfer was made in your favor.

This tax does not apply to rural properties, only urban ones (homes, plots, commercial premises, etc.). Additionally, if the property's value has not increased between the date the deceased acquired it and the date of inheritance, you may be able to avoid paying the plusvalía tax. Following a ruling by the Constitutional Court, the law now allows for no tax payment if there has been no actual increase in value.

The plusvalía municipal tax is typically the responsibility of the seller. However, if the seller is a non-resident in Spain, the obligation to pay this tax falls on the buyer. To guarantee payment, the buyer is legally required to withhold a portion of the sale price and pay it directly to the local tax authorities on the seller's behalf. This makes it crucial for non-resident sellers to have a professional calculate the tax accurately before the sale is finalized to avoid any issues or unexpected deductions from the final price.

Plusvalía Calculation: Two Available Methods in Malaga and Marbella for non-residents

Since the reform introduced by Royal Decree-Law 26/2021, taxpayers can calculate the plusvalía tax using two methods and apply the one that is more favorable:

1. Objective Method (Cadastral Value)

This method uses the cadastral value of the land portion of the property (not the value of the construction). A coefficient is applied to this value, which depends on the number of years that have passed since the deceased acquired the property until the date of inheritance. The state sets maximum coefficients for different time periods (e.g., for 1 year: 0.14; 5 years: 0.13; up to 20 or more years: approximately 0.45). Each city council can set lower coefficients. The result is the theoretical increase. The city council's tax rate (up to 30% by law) is then applied to this amount.

• Example: An apartment in Marbella with a cadastral land value of €80,000. Owned for 10 years by the deceased. The 10-year coefficient is 0.30. Theoretical increase = €80,000 * 0.30 = €24,000. Marbella's tax rate is 30%. Tax due = €7,200.

2. Real Capital Gain Method

This method calculates the difference between the transfer value and the acquisition value of the land. In other words, what the land was worth when the deceased purchased it (prorated from the purchase price) and what it is worth at the time of death. The difference, if positive, is the taxable base. The city council then applies its tax rate to this amount.

• Example: The deceased bought the Marbella apartment in 2005 for €200,000, of which an estimated €50,000 was for the land. At the time of death in 2023, the land is worth €100,000 (according to the reference/market value). The real increase is €50,000. With a 30% tax rate, the tax due is €15,000.

In this comparative example, the objective method resulted in a tax of €7,200 and the real capital gain method resulted in €15,000. The heir would choose the objective method and pay €7,200. If the real method had been lower, they could have chosen that one.

Each heir should do their own calculations, but a more practical approach is to provide the city council with the necessary data. They will usually calculate both amounts and automatically apply the lower one. If in doubt, it's best to consult them when you submit the application.

Inheritance Tax Rebates in Málaga and Marbella

The law allows city councils to establish rebates of up to 95% on the plusvalía tax for transmissions due to death to certain relatives. Let's take a look:

Málaga City

Historically, Málaga has offered a 95% rebate to spouses and children who lived with the deceased in the transmitted property (i.e., the primary residence). While this exempted many, it left out heirs who didn't live there. In 2023, a new 12.5% rebate was approved for direct heirs who are not cohabitants for properties with a cadastral value of up to €150,000. While a smaller benefit, it extends some relief to more cases. In summary:

• 95% rebate: Spouse, children, or parents who lived with the deceased in the inherited home (primary residence).

• 12.5% rebate: Spouse, children, or parents who did not live with the deceased, for properties with a low cadastral value (up to €150,000).

• 0% rebate: All other cases (more distant relatives, properties that were not the primary residence, or properties with a cadastral value over €150,000 for non-cohabitants).

So, if the plusvalía tax in Málaga came to €10,000:

• An inheriting child who lived with the deceased would pay only €500.

• An inheriting child who did not live with the deceased (in a house with a cadastral land value of €100,000) would get a 12.5% discount and pay €8,750.

• An inheriting nephew (with no rebate) would pay the full €10,000.

Marbella

The Marbella City Council applies the maximum 95% rebate for transmissions mortis causa to descendants, ascendants, and spouses, without an explicit cohabitation requirement. This is according to recent regulations (it's always a good idea to confirm each year, but Marbella has traditionally been generous). Therefore, inheriting a house in Marbella from your parents or partner will mean you only pay 5% of the calculated plusvalía tax.

• Example: Calculated plusvalía tax is €8,000. With a 95% rebate, the tax due is only €400.

Other municipalities along the Costa del Sol may have their own rebates, so you should always check the local ordinance. If there is no rebate, the general rule applies (full payment based on the most favorable calculation).

Deadlines and Procedures for Paying Plusvalía Tax

Heirs have 6 months from the date of death to declare the plusvalía tax. This period can be extended up to 1 year if a request is made within the first 6 months. The deadline coincides with the Inheritance Tax (Impuesto de Sucesiones), but they are independent procedures. The Inheritance Tax is managed by the Junta de Andalucía, while the plusvalía tax is handled by the city council.

How to file: In Málaga, there is a specific declaration form for plusvalía from an inheritance. You can do this online (via the Virtual Office) or in person at Gestrisam. In Marbella, you also file a form with the property and heir information. You must attach a copy of the death certificate and the title (will and acceptance of inheritance, if available).

The city council will typically issue a liquidation with the amount to be paid, applying the rebate if applicable (in Málaga, you must explicitly request it in the form). In other cases, a self-assessment is required, where the taxpayer calculates and pays the amount themselves. Each city defines whether it's a liquidation or a self-assessment, but Málaga and Marbella tend to use the liquidation method due to the complexity of the two calculation methods.

Payment: Once you receive the liquidation, you pay it at a bank or online within the specified deadline (usually one month from notification). Failure to pay will result in surcharges and, eventually, a payment order.

If there is no capital gain (a loss): You can file a declaration stating there was no increase in value. It's a good idea to document the acquisition and transfer values. The city council may accept this and not charge the tax. If they still issue a bill, the heir can appeal with evidence. After the legal reform, it is expected that if you can prove a loss (e.g., the land's purchase value was greater than its current value), you won't be charged.

Practical Calculation Examples

• Inheritance in Málaga of a primary residence to a spouse:

  • Cadastral land value: €50,000. Ownership for 20 years. Málaga's coefficient for 20 years: let's assume 0.45.

  • Objective increase: €22,500. Tax rate: 29%. Tax due = €6,525.

  • 95% rebate (cohabitant) means they pay only €326.

  • Real Method: Purchased in 2000 for €100,000 (land was €30,000). The land's value in 2023 is €80,000, so the real increase is €50,000. 29% tax rate = €14,500.

  • In this case, the objective method was lower (€6,525), and after the rebate, the final payment is €326.

• Inheritance in Marbella of a vacation apartment to a child (non-cohabitant):

  • Cadastral land value: €100,000. Ownership for 10 years. Coefficient: 0.30.

  • Objective increase: €30,000. Tax rate: 30%. Tax due = €9,000.

  • 95% rebate means they pay only €450.

• Inheritance in Málaga to a nephew (no rebate):

  • Cadastral land value: €80,000. Ownership for 15 years. Coefficient: 0.40.

  • Increase: €32,000. Tax rate: 29%. Tax due = €9,280.

  • With no rebate, the full amount of €9,280 is paid.

The plusvalía municipal tax is a crucial consideration when inheriting urban properties in Málaga, Marbella, or any municipality. Thanks to local rebates, the impact is minimal for direct relatives in many cases. Málaga offers up to 95% (with conditions), and Marbella offers a general 95% rebate. Even so, it is essential to correctly calculate the tax base using the most favorable method and to file the declaration on time.

If you have just inherited a property, don't forget this procedure, thinking everything is handled with the Inheritance Tax. Each process is necessary to properly close the succession.

The examples above should be reviewed by a lawyer or tax advisor for application to specific cases. They do not constitute express legal advice.

Need help with the calculation or management of the municipal plusvalía tax for your specific situation? Contact us through our website. Our team at InternationalTaxLegalSpain.com and ImpuestosHerencias.es knows the ordinances of Málaga, Marbella, and other city councils in detail and will assist you in applying all available rebates so you pay only what is fair.