Plusvalía (Town Hall Tax) Blow

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

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.

18 Comments

  • david stainton

    I sold my propert in local authority Manilva in December 2018, and the lawyers agreed plus valia calculation of 6830 Euros to be retained by purchasers lawyer, until December 2019, awaiting confirmation of the previous Constitutional court decision. I bought my property in 2002, and so there was a large increase on the database values, but a considerable actual loss on my property sale from initial purchase of 315000 euros to 215000 euros sale price. There was a complication in that I paid plus valia tax in 2013, when my wife, who was joint owner, died and estimated figures were used. Should I now be able to claim the retained amount from the purchasers lawyer, and prevent it being paid to local authority, as was their intention in December 2019 failing a definitive decision and this decision becoming law ?

    • Nicola Ryan

      Good Morning David,

      Thank you for your enquiry.

      Yes of course, we would recommend trying to claim the plus valia tax back for sure. Each area is different, we have claims for Torrevieja and Torre Pacheco who have not received any refunds but others, yes. The problem is no-one knows if the claim will be successful or how long it will take but would be best to get the ball rolling and submit your claim in order to find out. We hope this helps.

      Kind regards
      Nicola

  • David stainton

    Hello Nicola
    It is a year since we corresponded and no indication from Manilva Council yet. Purchasers lawyer still holding retained money for calculation of plus valia but based on Supreme Court cases, I should not pay at all as you will see from previous correspondence, I made a massive loss on actual sale.
    The buyers lawyer I sists he will release payment to Town Ha if not heard by December.
    Do you know if this ruling is likely to be enacted by national government soon? Would it be reasonable to ask for money still to be held for longer time as this agreement was before pandemic which has delayed matters unusually since March 20020.
    Regards
    David Stainton

    • Jane

      Hi David

      Nicola will reply to you directly.

      Kind Regards

      Jane

  • James alexander

    We sold our apt December 2019 at a big loss our lawyer told us that we would receive the 3% tax + plusvalia tax refunded but could take up to a year we waited paiently and heard nothing about the plusvalia tax we are getting no further than the receptionist with our calls we are now back in UK and cannot visit there office in torrevieja what can we do.

    • Jane

      Hi James

      I can either suggest you e mail them, or perhaps message their FB page, or if you wish perhaps we can assist in contacting them on your behalf.

      Kind Regards

      Jane

  • James alexander

    Could you please tell me if there has been
    a change to the 4 years to 6 month to appeal the plusvalia tax to torrevieja town hall. Thanks

    • Amanda Thomas

      Good morning, There are 2 possible appeals:

      1º) 4 years since the tax was paid

      2º) 1 months since you receive the tax bill
      Kind regards

  • James alexander lappin

    Spoke to the lawyer on Monday he totally changed and dismissed what he told us but we will not be walking away. And not to pleased with Remax who recommended them. Would it possible if you could give me roughly what the cost would be get this money back from the town hall. Thanks

    • Amanda Thomas

      Dear James, I have re-read your messages. It sounds as if your lawyer has done the paperwork (if you are non resident this would be Modelo 210 and Modelo 211), but it is you are still waiting. You are not the only ones, we have clients here too that are in the same position and have been waiting years (it is apalling) and there is nothing we can do to chase it. It is because I think the Town Halls passed the appeals and responsibility for plusvalia to SUMA office and there are so many that there seems to be a log jam at the SUMA office, not helped by covid either, so we have no idea how long it will be for even our clients. Making another claim will not help, only cost you more money in our opinion (I would need to check you can too if already done). Just make sure with the lawyer that the original paperwork was presented, but if they are saying that it is out of their hands and they don’t know what the situation exactly is or how long it will take, that is true, I am sorry, With kind regards, Amanda

  • James a lappin

    We just found out on Monday that lawyer had not submitted any claim reason being he did not have power of attorney and did not hear from us he told us the time had run out we had surmised that he had submitted a claim on our behalf and waited patiently giving it a year as he told us. We where not aware that p o a only lasted for the sale.. would be helpful if we gave you a call….

    • Amanda Thomas

      Dear James, I have emailed you directly on this subject, Kind regards

  • john mooney

    I sold my prop­erty in local au­thor­ity Torre Del Mar [Velez Malaga] in November 2018, and the law­yers agreed the plusvalia cal­cu­la­tion of 6500 Euros to be re­tained by my law­yer, un­til XXXX, await­ing con­firm­a­tion of the pre­vi­ous Con­sti­tu­tional court de­cision. I bought my prop­erty in 2005, and so there was a in­crease on the data­base val­ues, but a con­sid­er­able ac­tual loss on my prop­erty sale from ini­tial pur­chase of 217000 euros to 162000 euros sale price. My solicitor has applied [Mar 2019]. Should I now be able to claim the re­tained amount from the my law­yer, and pre­vent it be­ing paid to local au­thor­ity, as this was probably there in­ten­tion [ No date given as they did not know what happening and they were waiting this de­cision be­com­ing law ? I have asked her several times since then ‘still No information from the local au­thor­ity in Torre Del Mar [Velez Malaga].

    • Amanda Thomas

      Hi John, I have checked with one of our lawyers and the answer I am afraid is no you cannot claim the retained amount from your lawyer. You need to wait I am afraid. All the town halls are different but some in our area are also taking this long unfortunately. Kind regards

  • Jane Mason

    I sold my property in aspe and my notary has put paperwork in to claim our plus valia back but has not had a response.she is now telling me that we have six months to take them to court at a cost of 300 euros for her and 800 euros for court. not sure what is the best to do.

    • Nicola Ryan

      Thank you for you enquiry Jane,

      The town halls have no timescales in which to deal with the refund of plusvalia claims. The only way to “push” them to deal with your claim, would be through the courts, but this could not guaranteed a refund either. If you have sold at a loss, there is greater chance you would receive a refund by going through the courts. We hope this helps.

      Kind regards
      Nicola

  • Su

    We sold our apartment in Torrevieja in June 2019 at a loss of around €20,000 and just under €6,000 was to be paid directly to SUMA by the estate agent in respect of the Plus Valia/capital gains tax. We were advised to claim both that and the 3% non residents tax and we so paid a €250 fee to a local tax lawyer to make the claims on our behalf.

    We received the non residents tax refund shortly after but nearly 4 years later we haven’t had the Plus Valia refund. The lawyer will not return our emails or calls and we don’t know what to do next. Some people tell me that our lawyer needed to send a letter of appeal after the sale and that we only have 4 years to make the claim. The lawyer won’t answer our question on whether she actually made the letter of appeal and recently we have discovered that the agent did not actually pay the Plus Valia tax fee until 16 months after the sale and the payment was made in the name of the buyer – not us. The agent said there was a problem with the SUMA office payment system at the time and then the payment was overlooked until they were sent a demand for payment with added fine, which they paid. Can we still try to claim the Plus Valia back or has the agents non compliance with the 30 day rule now negated that possibility?

    • Amanda Thomas

      Good morning, I will respond to you directly by email, With kind regards, Amanda

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