Just recently, on 9th November, the RD Law 26/2021 was published. This is a revised adaptation of the Law of Local Treasuries to the recent TC Ruling regarding the IIVTNU (Increase Value of the Land Tax)
The main feature is the introduction of two new methods for calculating taxable income:
1. OBJECTIVE SYSTEM:
The annual percentages applied to the value of land are substituted by maximum coefficients, depending on the number of years elapsed since the operation, these coefficients will be updated annually subject to the growth of the real estate market.
2. REAL CAPITAL GAIN:
Taxpayers will have the option to be taxed on the real capital gain of the land (difference between the sale price and the acquisition price) if this is lower than the taxable income yielded by the objective system. In this case, the municipalities will be able to carry out corresponding approvals.
According to the published regulation, the taxpayer will be able to choose the option that best suits their interests, guaranteeing that if no profit is obtained from the sale of a property, he/she will be exempt from paying tax.
Additionally, capital gains generated in less than one year will be taxed, in essence, those gains that occur when less than one year has elapsed between the date of acquisition and the date of transfer.
If more information is needed, please do not hesitate to contact us.