Spain’s Constitutional Court has struck down the municipalities’ capital gains tax on property, the so-called ”plusvalía” (Impuesto sobre el incremento de valor de los terrenos de naturaleza urbana). Plusvalía has been an important source of income for the municipalities.
Now Spain’s Constitutional Court rules in favour of an estimated 35,000 affected people on the Costa del Sol, according to the valuation institute Tinsa. The Constitutional Court follows the line taken by the Supreme Court in February.
The capital gains tax has long been criticised as unconstitutional, and several individual cases have gone to court. The tax has been levied on the increase in the officially assessed value of the land the property is built on since it was last sold. But the tax has worked out badly, as many property owners, when the bubble burst, had to pay thousands of euros on a sale or an inheritance even though the value of the property had fallen.
The percentage has also varied depending on where the property is, how large the land is and how long has passed since it was last sold. This applied both to new and to second-hand homes.
With Wednesday’s Constitutional Court decision, a wave of claims is now expected in which taxpayers want their money back. That applies not least where the sale price has been lower than the purchase price.
The first step for anyone affected is to submit a written claim for a refund of the tax to the town hall, according to the lawyer David García Vázquez. Going to court, on the other hand, is not worthwhile unless the sum exceeds 10,000 euros.
One case in Fuengirola concerns a person who paid 5,000 euros in plusvalía even though they had sold their home for 70,000 euros when the purchase price had previously been 220,000 euros.
Facts: Plusvalía
Plusvalía was the tax levied on the increase in the officially assessed value of the land the property is built on since it was last sold. The percentage varies depending on where the property is, how large the land is and how long has passed since it was last sold. This applies both to new and to second-hand homes and is paid by the seller.
18/05/2017 svenskamagasinet.nu