New way of calculating those Capital Gains obtained from a property sale

The Government has recently modified the way of calculating those Capital Gains obtained from a property sale, mostly known in Spain as IIVTNU (Tax on the Increase of Value in Urban Lands). Now we have two alternatives to calculate the tax rate.

 Objective method: with this new method, the coefficients will be updated annually based on the evolution of the real estate market.

Real method: taxpayers will be able to opt for this method through the real capital gain, which will be calculated by the difference between the sale price and the acquisition price.

Therefore, the new calculation method will not violate the principle of the taxpayer's economic capacity.

Within the reform, we can also point out two important developments.

Assumptions of non-subjection:

Operations in which there is no increase in value will not be subject to tax.

Operations less than a year:

The great novelty is that from now on, all those operations in which there is a capital gain generated in less than a year due to their possible speculative nature would be taxed.