The Treasury clarifies what happens to the municipal capital gain if you sell at a loss a property of which you bought a part and inherited the other

When a property is sold, the seller has to face the payment of municipal capital gainswhich taxes the increase in land value. However, it may happen that an owner sells a property for less than what it cost, thus making a loss, and in which case the transaction may not be subject to payment of this tax. But what happens if one part was purchased and the other was inherited? How should this acquisition cost be calculated?

This doubt is resolved by the General Directorate of Taxes (DGT), which depends on the Ministry of Finance, in the binding consultation V0406-26, of February 26, 2026 (which can be check this link). In it, a taxpayer explained that he wanted to sell for 45,000 euros an urban plot of land of which he had bought half in 1999 and inherited the other in 2005. However, he had not declared the inheritance until 2012.

For the Treasury, if the entire property is sold in a single operation, the acquisition values ​​must be added and compared with the total sale price. If there is no increase in value and it is correctly accredited, the transfer will not be subject to the tax, although the City Council may verify the declared amounts.

How to calculate the municipal capital gain when a land has been acquired by purchase and inheritance

Article 104.5 of the Local Treasury Regulatory Law establishes that the municipal capital gain does not have to be paid when it is demonstrated that the land has not increased in value between the acquisition and the transfer.

The Treasury explains that, when a land has been acquired in parts on different dates and is subsequently sold in its entirety, “the calculation must be carried out globally and not partially.” This means that you do not have to calculate the profits or losses of each party separately, but rather compare the sale price with the sum of the acquisition values.

In the case presented, the purchase value of half of the land in 1999 and the declared value of the inheritance would have to be added, which would add up to a total of 46,000 euros; Taking into account that the sale price would be 45,000 euros, there would be a loss of 1,000 euros.

If these values ​​are accepted, you would not have to pay the municipal capital gain. Now, the DGT clarifies that, to verify if there really is a loss, you must take the value that appears in the purchase and sale deeds or the one verified by the Administration, if the latter is higher, without adding the expenses or taxes paid for these operations.

In the case of inherited properties, the value declared in the Inheritance and Donation Tax or the one verified by the Administration is used, if it is higher. Therefore, the City Council can review the declared amounts and check whether a loss has really occurred, before admitting that the sale is not subject to municipal capital gains.

Declaring the inheritance seven years later does not prevent the municipal capital gain from being avoided

Another important aspect of this query is that the taxpayer did not declare the inheritance until September 2012, even though his mother had died in June 2005.

Given this situation, the Treasury clarifies that having declared the inheritance seven years after death does not, in itself, prevent the avoidance of the payment of municipal capital gains. However, the 34,000 euros that the taxpayer declared in 2012 must correspond to the value that the inherited part had in 2005, when his mother died, and not what it might have seven years later.

For this reason, if the City Council suspects that the 34,000 euros correspond to the value of the land in 2012 and not that of 2005, it may initiate a check to find out how much it was really worth when it was inherited. If you determine that its value was lower than the declared value, you could reject the 34,000 euros as the acquisition value, since it could change the result of the calculation and cause, instead of a loss of 1,000 euros, the sale to reflect a gain for which the municipal capital gain would have to be paid.

Finally, the Treasury reminds that the taxpayer must request not to be subject to the tax and provide the documents that prove the acquisition and transfer values. It will be the City Council who checks whether it has been sufficiently demonstrated that there is no increase in value.