What is the plusvalia tax in Spain?

The Plusvalia Tax is a capital gains tax The local authorities determine the amount of plusvalía to be paid for each house purchase in Spain, depending on the area where the property is located, and on the profit being made on the sale according to the difference between the property value stated in the deeds of the house prior to the sale, and the price stated in the contract for the current sale.

Infact in the past the parties involved in the sale or purchase of the property look for ways to reduce the final amount, by putting one figure on the sales contract and by agreeing on another and so avoid paying a large plusvalía. For this reason the real value of most property in Spain bears little relation to the value as stated in the deeds. However the authorities are starting to make it more difficult to dodge taxes this way and what used to be a straightforward tax ploy is no longer quite as easy and certainly not recommendable.