It seems rather ironic that a tax which is linked with the property market should have shot up during the years when the construction industry has been at a virtual standstill, but that is the case with the ‘plusvalía’, which is a municipal capital gains tax charged on the increase in value of the land when a property changes hands. This tax has become a veritable gold mine for town halls in the province of Málaga.
The ‘Impuesto sobre el Incremento del Valor de los Terrenos de Naturaleza Urbana (IVTNU)’, to give it its proper name, is levied on the increased value of a property when it is sold, compared with its value when it was bought. When a property is sold to somebody else, the tax is paid by the vendor. If it is inherited or given as a gift, the person acquiring it pays the tax.
The increase in revenue from this source began in 2013 and has continued: figures from the Provincial Revenue Board and the five local authorities who are not part of the organisation (Málaga, Fuengirola, Mijas, Benalmádena and Alhaurín el Grande) show that in 2015 the total amount raised was around 135.7 million euros, compared with 99.8 in 2014 and 80.3 million the previous year.
Although the property market has been showing signs of picking up and there have been more sales, two other factors really lie behind this considerable increase. One is that rateable values have doubled.
The General Land Registry reviewed the rates during the year s of the construction boom, and market prices now bear no relation to the ones at that time. This also resulted in an increase in the IBI tax.
Secondly, and this is something which the mayors can control, the tax rate which is applied to the base figure (obtained by multiplying the value of the land by a percentage which corresponds to the length of time a person has owned the property) in most municipalities was close to or the same as the legal maximum, which is 30 per cent.
Among large municipalities, Mijas and Estepona were the exception to this, but ‘were’ is the important word to note because in 2016 they have both imposed large increases; in Mijas the tax rate has risen from nine to 27 per cent. Of the others, Fuengirola charges 25 per cent, Vélez between 25 and 28, depending on each case, Benalmádena 27.5 per cent, Torremolinos 28, Antequera 28, Ronda 29.32, Rincón 29.87 and, at the top of the list, Marbella, with the full 30 per cent.