Have you inherited or sold a house ? May be worth looking for a rebate of your plusvalía tax...

If you have inherited or sold a house in the last years, it might be worth investing some time on looking into your plusvalía tax. You may have a right to get it returned.

Spanish Law establishes that if you have inherited or sold you have to pay a tax called "municipal surplus value" for the profit obtained with the transmission. To do this, after each sale or acquisition the seller was given one month to produce a solicitude into the Town Hall where the home is located, which will issue you an invoice to pay the tax. To make it more complex, the Law also makes responsible the purchaser for the unpaid plusvalia invoices when the seller is non resident in Spain, so a very common practice is that the purchaser or the purchaser´s solicitors takes over the process on paying or making that solicitude with the local authority.  

In 2017, after a long serial of Court Cases within the administrative courts, the Spanish Constitutional Court established that this tax was unconstitutional in cases where there was no capital gain from the transmission. That is, in those cases that purchase price (or valuation of the estate, in inheritance) was the same or higher than the selling price. This bring along much more discussions and litigations with the local tax authorities.

 Just more recently, in October 2021, the Constitutional Court has established that the tax itself is illegal, not only when there is no gain, but in all cases. The Court considers that calculation system to obtain the amount payable does not guarantee respect for the fundamental principle of being based on the economic capacity of taxpayers. So, this has been something like an eartquake in the real estate law and municipal financial departments, even though the sentence sets that it will only would be considered null and void those bills that were not consented (appealed or discussed or not payed) at the time of the sentence being awarded. 

At the risk of leaving the Town Halls without a very significant source of income, on November 10th, 2021, the spanish government approved an urgent new regulation regulating the tax, under the form of a Decree. However, this new regulation has been appealed again before the Constitutional Court on the understanding that it has formal and material defects that make it unconstitutional.

In the event that this new appeal against the new regulations prospers, as it is quite likely to happen, those taxpayers who have filed an appeal or challenged the invoice or bills of plusvalía, will have a possibility that they have not to pay or to get a return of the amounts payed in. 

For all this reasons, we consider wise to study the situation of every deal that has been done in the last years and particularly, from October 2021 onwards. You may come with the surprise that you have a right to obtain a rebate. As well, if you are selling or inheriting a property, seems to us a good idea consider the possibility of lodging a claim against the plusvalía invoice just in case that the appeal becomes succesful, as it seems will happen.

We can certainly provide you with the best advise on how to do this. Do not hesitate to contact us and ask for further information. 

Javier Herrera Llamas