These are the two alternatives for calculating the tax established by the royal decree-law:

br /> The objective formula: In this formula, with new coefficients, the

cadastral value of the property. Approving each year new coefficients that will be
contemplated in different laws, thus evolving according to the real estate market
. real estate. It will be an optional option, given that the taxpayer himself
will have the option to pay the tax. will have the possibility of paying tax based on the real capital gain obtained at the
moment when the property is transferred. moment in which the property is transferred.

The real formula: In this case, the difference between the price of the
transfer or sale and the price of the
transfer or sale and the price of the
transfer or sale is calculated. transfer or sale and the price of the purchase or acquisition of the property. In the event that
it is demonstrated that the real surplus value is lower than that resulting from the
estimate, the actual value may be applied. The taxpayer shall be given the option to select between these two methods whichever is more convenient for him. that best suits him. Rodriguez emphasises that this tax is not payable unless a profit is made. a profit. Another novelty is that the recorded capital gains will be taxed from the date of acquisition and until the date of sale. until the date of sale of less than one year.

The Royal Decree-Law amends the text consolidated by the Ley de Supervisión Reguladora de
las Haciendas Locales and will come into force following its announcement on Tuesday 9 November in the BOE,

In addition, local councils will have six months to bring it into line with their legal framework. In 2019, local councils in Spain collected 2.5 billion euros through this
tax. tax. The government stated that they do not need to cut their services because they could
continue to provide services to their citizens. continue to provide them to citizens.

The government stated that they do not need to cut their services because they could continue to provide them to citizens.

The Royal Decree-Law establishes that the taxable base of this tax will be the
result of the multiplication of the cadastral value of the land at the time of accrual by
the coefficients that have been approved by the Town Councils, which may never exceed
those indicated in the following paragraphs. exceed those indicated in the following table:

In addition, it is recognised that local councils, solely for the purposes of this tax
, may correct the cadastral value of the land by up to 15% depending on the degree
of taxation. may correct the cadastral value of the land by up to 15% depending on the degree of
updating of the land. This ensures that taxes are adapted to local
real estate realities. realities of each location.

Different examples of municipal capital gains payments

. An example would be the owner of a house bought in 2007 for a total of 300.000
300,000 euros and sells it in 2021 for 290,000 euros would not have to pay the municipal capital gains tax

. municipal capital gains tax, as there is no gain of any kind, in fact, on the contrary, there is
a loss. On the other hand, where there is a gain, the two methods can be applied to choose the one
which is the most profitable. which is most beneficial for calculating the taxable base. One of the partners of the legal firm
One of the partners of the law firm, Josí María Salcedo, clarifies the different scenarios that could arise. Let's think of another example, a home that was purchased in 2017 for 310,000 euros, and which
in 2021 is sold for a total of 350,000 euros. In this case, the cadastral value on the
date of accrual is a total of 100,000 euros, corresponding to 60,000 euros for the
land. land. Therefore, it can be said that the value of the land would represent 60% of the total cadastral
value. total cadastral value. If, on the one hand, we use the first formula, the objective calculation formula, the taxable base
would be 10,000 euros. would be 10,200 euros, which would be the result of multiplying the cadastral value of the
by the coefficient of the table (60,000 euros x 0.17). However, if we go to the actual formula, the result of applying the percentage that the land represents of the value of the property would be calculated by applying the coefficient of the table (60,000 euros x 0.17). percentage that the land represents over the total cadastral value (60%) to the profit obtained
(40,000 euros). (40,000 euros). Giving a total result of 24,000 euros. That is to say, in this case, the taxpayer could pay the tax according to the taxable base obtained by the mó n of the property. taxable base obtained by the objective method (10,200 euros), instead of that obtained by the actual

actual capital gain (24,000 euros). That is to say, if a tax rate of 30% is applied, you will pay
3,060 euros (10,200 x 30%) in the first case and 7,200 euros (24,000 x 30%) in the second case. However, the situation can also be the other way around, where, for example, a home that is purchased in the year of purchase
purchased in 2014 for a price of 250,000 euros is sold for 260,000 euros in 2021. 2021. Putting that the land represents 20% of the total cadastral value. Then, the actual capital gain obtained in this case would be 10,000 euros. For this case,
we will apply the proportion of land in the total cadastral value (20%). Therefore, the taxable base
taxable base based on the actual capital gains is only 2,000 euros (10,000 x 20%).

In this case, the gains on the land taxable value are only 2,000 euros (10,000 x 20%). In this case, the gains under the objective formula would be higher. Therefore, for the cadastral value of the
cadastral value of the land (20,000 euros), we will apply a coefficient of 0.12, which will produce a

result of 2,400 euros

. result of 2,400 euros
Therefore, the taxpayer may choose to pay the tax on the taxable base that
has been obtained from the actual capital gain (2,000 euros). Thus, he/she would pay 30% of the same (600
euros), and if taxed on an objective taxable base (2,400 euros), the amount to pay is
720 euros
. The adaptation period for local councils will be six months
. Since the ruling was handed down (on 26 October), the local councils have not been able to collect
The local councils have been collecting this tax, hence the urgency of the Treasury to have it ready as soon as possible and to do so through a Royal Decree-Law
. to do so by means of a Royal Decree-Law, which makes it possible for it to enter into force
immediately once it has been published in the Official Gazette. immediately once it has been published in the Official State Gazette, without detriment to the fact that
that it can later be processed in Parliament as a bill which is subject to change. subject to change.

Despite the rush for the entry into force of this legislative text, the government will give the local councils six months to adapt the law.

six months for local councils to adapt their regulations to this new legal framework.

According to Gestha there is a risk of unconstitutionality of the Royal Decree-Law. The technical experts of the Ministry of Finance (Gestha) have released a statement in which
They warn of the risk of unconstitutionality that the new municipal Plusvalía has been
carried out by means of a Royal Decree Law, omitting ordinary laws. According to Gestha, this new regulation could infringe the principle of the reservation of the law of
Article 133 of the Constitution, and for this reason, they recommend that, once it has been
The bill should be passed as a draft law in order to eliminate any risk. From
his point of view, with this processing as a draft law, it would be possible to improve the content
and wording of the bill. and the wording and thus achieve greater stability of the new regulation. Gestha also urges municipalities to approve the tax by-laws before the six-month deadline has passed. The six-month deadline has passed, as they calculate that each month of 'impasse' means
a loss of around 170 million in the municipal coffers.