Municipal Capital Gains and Vehicle Taxes: Key Details

Municipal Capital Gains Tax (Plusvalía)

Taxpayers for Capital Gains Tax

This tax applies to two types of contributors:

• The person who transmits or constitutes property rights for consideration.
• The person who acquires property rights free of charge (the acquirer).

Tax Base Calculation

To determine the tax base, three key facts are considered:

1. The cadastral value of the land at the time of accrual, excluding the value of any construction.
2. The period elapsed from acquisition to transmission, rounded down to a maximum of 20 years.
3. The annual percentage increase set by the City (in the tax ordinance), within a state-mandated ceiling.

Usufruct and Life Interest

For usufruct, a distinction is made between temporary usufruct and life interest. A percentage of the land value is applied, following the rules of transfer tax.

Collective Assessment Procedures

In general municipal collective assessments, a reduction can be established on the land value, with a maximum of 60% for 5 years.

Tax Rate Determination

The determination of the tax rate corresponds to the Municipal Council, within a ceiling of 30%.

Capital Gains Tax Calculation Example

• Rateable Land Value: 1000
• Rateable Building Value: 400 (Note: Calculation typically based on land value only)
• Acquisition Date: January 1, 2000
• Sale Date: March 3, 2010
• Annual Percentage Increase: 2.5%
• Tax Rate: 30%

Taxable Base Calculation: 1000 (Land Value) x 10 (Years) x 2.5% (Annual Increase) = 250

Tax Due: 30% of 250 = 75

Tax Management and Filing

The taxpayer has a duty to file a tax return. The deadline is 30 days for inter vivos transfers (e.g., sales) and 6 months for transfers due to death. The Municipal Council may decide to apply the method of self-assessment.

Motor Vehicle Tax (IVTM)

Taxable Event

The taxable event is the ownership of a roadworthy motor vehicle for use on public roads. The municipality of taxation is determined by the domicile that appears on the vehicle's registration certificate.

Taxpayer

The taxpayer is the person whose name appears on the vehicle registration certificate. This can be a natural person, a legal entity, or an entity without legal personality.

Fee Schedule

Fixed fees are established that vary by vehicle type (e.g., car, bus, truck, tractor) and according to power (e.g., fiscal horsepower, payload capacity, cubic centimeters). The Municipal Council can apply a rate of increase on the fixed amount, not exceeding 2 times the base fee.

Tax Period

The tax period is the calendar year.

Accrual and Management

Accrual generally occurs on the first day of the tax period. In the case of vehicle acquisition and first registration, the fee is prorated quarterly.

For management and application, the City may require the tax through self-assessment. The assessment, collection, and inspection are the responsibility of the municipality of taxation. It is common to manage this tax through standard billing and receipt issuance.