Plusvalía (Town Hall Tax) Blow


Posted and filed under General Articles of Interest, Taxes in Spain.

Plusvalía (Town Hall Tax) Blow

There has been more controversy with the Supreme Court of Spain recently. It has stated that the formula for calculating plusvalía (an increase on land value tax) issued by town halls is valid unfortunately, so the Town Halls will not have to change their bills for this tax. Many taxpayers had appealed and are waiting decisions on their bills.

The Judgment dated March 27, 2019, ruled on an appeal against the legal formula for calculation of the tax on the increase in land value from each change of ownership.

This sentence closes the door for thousands of taxpayers across Spain who could have recovered money overpaid for plusvalia tax on the sale of their property, where they made a gain on the sale and had hoped to reclaim it.

However, for those who made a loss on the sale they already do not pay plusvalía tax. The Supreme Court had previously decided that no one will pay plusvalia if they sell their house at a loss. If someone has paid it, there may be a possibility of reclaiming this, if within a time limitation of 4 years.

This did not mean that the tax was abolished or that someone who made a gain did not have to pay it, just that a loss is an exception.

This battle in the Courts has been a very long one, and local town halls in Spain have been waiting for a long time as this decision has an impact on thousands of euros for the town halls.

Now it seems that this Supreme Court ruling will now close the possibility of any appeals against a reduction in the tax based solely on this aspect. The Town Halls have won, the tax payers lost.

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