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Does a flat that's over 20 years old pay capital gains tax?

Municipal capital gains tax is one of the taxes that raises the most questions among those selling a home, especially if it's a property that's several years old. Many homeowners wonder whether an apartment that's more than 20 years old should pay capital gains tax or, on the contrary, if it's exempt due to the passage of time.

The answer isn't as simple as it might seem. It depends less on the age of the apartment than on the value of the land and the profit obtained from the sale. Below, we explain, in a clear and up-to-date manner, when it is paid, who pays it, and how it is calculated, with verified data applicable throughout Spain.

What is municipal capital gains tax?

The municipal capital gains —its technical name is Tax on the Increase in the Value of Urban Land (IIVTNU)— taxes the increase in value experienced by the land on which a home is built between the time of its acquisition and the time of its sale.

That is, it does not focus on the total price of the apartment, but only on the land value, determined by the City Council according to its cadastral value and the time that the property has remained owned.

An apartment that is more than 20 years old pays capital gains tax.

Yeah, An apartment that is more than 20 years old can pay capital gains tax., provided there has been an increase in the value of the land. The age of the property does not exempt you from the tax: what really counts is whether, when sold, the land is worth more than when it was purchased.

For example, if you purchased a home in 2000 and sell it in 2025 for a higher price, the City Council may consider that there has been increase in value and, therefore, demand payment of the municipal capital gains tax.

However, if the value of the land has decreased - for example, after a market crash or a cadastral devaluation - you should not pay, provided that the loss can be proven with documentation.

Who pays municipal capital gains tax?

The general rule is simple:

In a sale, the municipal capital gains tax is paid by the seller.
In an inheritance or donation, he pays it heir or donee, that is, the one who receives the property.

However, there may be exceptions if expressly agreed in the contract. In operations of high value, such as those involving luxury properties, it is common for buyer and seller to negotiate who assumes the cost of the tax, especially in contexts where the calculation may vary depending on the method applied.

How municipal capital gains are calculated

Since the legal reform of 2021, there are two calculation methods and the taxpayer can choose the most favorable one:

1. Objective method (based on the cadastral value of the land)

It multiplies the cadastral value of the land for a coefficient set annually by the City Council, depending on the years elapsed between the purchase and sale.
The municipal tax rate is then applied, which can reach up to 30%.

Practical example:

Cadastral value of the land: €60,000
Years of ownership: 20 years
Coefficient: 0.45
Tax rate: 25%

Calculation:
60,000 × 0.45 = €27,000 (increase)
27,000 × 25% = 6.750 € of municipal capital gains.

2. Real method (according to effective profit)

It is calculated from the difference between the sale price and the purchase price, always considering the proportion that corresponds to the land (not the total of the house).

This method is usually more favorable in areas where land values have grown little or even decreased.

When is capital gains tax not paid?

There are several situations in which this tax is not payable, even if the apartment is more than 20 years old:

There is no profit: if the selling price is equal to or lower than the purchase price.
The land has not increased in value: It is demonstrated with writings and receipts.
Transfers by payment in kind or foreclosures of the habitual residence.
Legal reforms: Since 2021, the Constitutional Court has repealed the obligation to pay capital gains tax when there is no real profit.

In all cases, it is essential submit the documentation that proves the lack of profit before the corresponding City Council.

What factors influence payment

Although the length of ownership (more than 20 years, in this case) affects the coefficient applied, does not eliminate the tax obligationThe main factors that determine whether or not payment is made are:

Location and cadastral value of the land.
Real estate market variation.
Purchase and sale price.
Cadastral updates or urban reforms.
Municipal regulations, since each City Council can set different rates and coefficients.

Therefore, two apartments of the same age can have very different results: one pays capital gains tax and the other does not.

What to do if you have sold a flat that is more than 20 years old

If you have recently sold an older home, it's a good idea to follow these steps:

Review the purchase and sale deeds.
Check the declared values and the proportion corresponding to the land.
Check the cadastral value.
You'll find it on your property tax receipt or on the Cadastre website.
Request the calculation from the City Council.
You can request information about the estimated amount and the available calculation methods.
Compare the two systems (objective and real).
Choose the one that is most beneficial to you.
If the value has decreased, claim the exemption.
Provide documentary evidence and avoid paying undue taxes.

Capital gains and inheritances: what happens to old homes?

In the case of inheritances, the tax may also affect apartments over 20 years old, even if the heirs have not obtained any financial gain.
The difference is that here the capital gain is calculated from the date the deceased acquired the property until the moment of transmission.

If the land has increased in value, the heir must pay it, even if the apartment is still old. However, if it can be proven that there was no increase or that the value has remained stable, the heir can apply for the total or partial exemption.

How to optimize tax returns on a sale over 20 years old

In the market of luxury propertiesIn a region where operations often far exceed the national average, municipal tax management can make the difference between efficient operations and unnecessary burdens.

Some useful tips:

Planning the sale with prior tax advice.
Update the cadastral value if there are discrepancies with the real market.
Choosing the most favorable calculation method to reduce the tax impact.
Negotiate contractually who assumes payment in purchase and sale transactions.
Take advantage of exemptions or reductions in the event of transfer of habitual residence, reinvestment or loss of value.

A good real estate agent can help you maximize profitability and minimize tax burdens on high-value transactions.

Where to get information and how to avoid mistakes?

Since municipal capital gains tax regulations depend on each city council, it is advisable to:

Consult directly the municipal web portal.
Review the updated tax ordinances.
Go to professionals specialized in real estate taxation and asset management.

In the case of premium homes, at Luxus Real Estates we offer personalized guidance for those who wish to buy or sell luxury properties with full legal security and adequate tax planning.

So…

An apartment that is more than 20 years old yes you can pay capital gains tax, if the value of the land has increased.
The tax is paid by the seller in a sale, or the heir in a succession.
Since 2021, there are two ways to calculate it, and you can choose the most advantageous one.
No payment if there was no real gain or if the land was not revalued.
Each City Council applies its own coefficients and tax rates, so it is advisable to seek advice before signing.

Knowledge and planning are the best tools to ensure that selling a home—even one more than two decades old—is a transparent, profitable transaction free of tax surprises.

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