Practical Guide to Capital Gains in Malaga: What Exemptions Do I Get If I Inherit a Property in 2026?

This week, the fiscal ordinances were presented at the Malaga City Council. One of the most controversial, with multiple detractors, is the surplus value tax, which is paid for the transfer or inheritance of a property. Technically, it is known as the Tax on the Increase in Value of Urban Land (IVTNU). Currently, it cannot be eliminated, but it is possible to apply the maximum deductions allowed by law: 95%.

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This cap is already applied to those heirs who lived with the deceased in their usual residence. For this, a cap of 100,000 euros in cadastral value is set, which encompasses the vast majority of properties in the city.

The novelty, and this will be the third year, is that the discounts have also begun to apply to non-cohabitants. Each year, a 12.5% discount has been applied, so that by 2026, when the ordinance completes all its administrative procedures, the discounted percentage will be 37.5%, with a cadastral cap of 150,000 euros.

Detractors criticize the tax as unfair, confiscatory, and for double taxation

We are always talking about surplus value mortis causa. The levy when selling a house, land, storage room, garage, or any other property follows its own path.

In the case of inheritances, detractors base their arguments on the fact that it is an unfair, confiscatory tax that practices double taxation, given all the taxes that inherently accompany the purchase of a property.

The measures to relieve the tax burden are valued for the coming year at about 2 million euros. Calculations by Gestrisam, the autonomous tax management body, indicate that about 5,000 Malaga families will benefit.

This is not a tax that accrues on January 1st. This means that the new regulatory framework will come into force when the regulatory ordinance is firm and reaches the end of its processing. The City Council estimates that this could happen in the first quarter of 2026.

Formalities

Broadly speaking, these are the main novelties concerning the municipal surplus value. But the changes do not end there. There are also technical improvements that eliminate formal requirements to access the bonus for cohabitants. This is intended to increase the potential beneficiaries by relaxing administrative requirements. A first improvement is that the concept of cohabitation extends when the deceased had moved to the heir's home for care reasons. For example, someone brings their father, suffering from an illness, to their home, although he still has his first residence elsewhere.

A second advancement involves the elimination of the requirement to live in the acquired dwelling for the two years following the death of the person. In other words, I can sell the inherited house or move to another when the person I lived with dies.

And the third leap in terms of requirements removes the assumption of retaining rights over the deceased person's home if there had been separation or divorce.

As practical information, Gestrisam has a calculation simulator on its website

Another element of analysis, much discussed within the Spanish Federation of Municipalities and Provinces (FEMP) and, in general, in plenary and municipal debates, is the impact of all these measures and the state regulatory framework on the coffers of the municipalities. In this regard, whenever possible, the Councilor for Economy and Finance, Carlos Conde, tries to remind that, both in inter vivos and mortis causa, since 2022, the average amount of the fees has been reduced by 36% as a result of the new calculation formula by application of Royal Decree Law 26/2021. In practice, Malaga would have ceased to receive, according to the councilor, about 20 million euros each year, which would be about 100 million in total accumulated. It is a saving for the taxpayer, but, logically, the municipalities claim economic compensation from the Government for the money they stop receiving.

Calculation System

In the calculation of the surplus value, as its name suggests, the increase in the value of the land from the time of acquisition is taken into account. This involves coefficients that are applied, which, moreover, may be modified by the Government. Indeed, in this exercise 2025 this has been the case, and this has led to an average decrease of 6%.

In general, the longer the time between the purchase and the sale, the more surplus value is paid. However, the cap on which it is calculated is 20 years.

As practical information, Gestrisam has a calculation simulator on its website that approximates the amount to be paid after a transaction. It is in the section of 'highlighted procedures'.

The surplus value is calculated by multiplying the cadastral value of the land by the corresponding coefficient for the years elapsed, and then the corresponding tax rate is applied.