It is a common occurrence that someone sells a property and a few months later receives a large bill for this tax. Sometimes, the amount of this tax is retained by the buyers and withheld for them to make the payment later, especially in those cases where the seller is a non-resident of Spain. Now, a recent Supreme Court ruling 1689/2020 of 9 December has declared this municipal tax null and void when the tax due wholly matches the increase in value of the land.
Category: Tax Law
MUNICIPAL PLUSVALÍA TAX – WHEN IT HAS TO BE PAID
Once we have taken the decision to sell our second home, we ask our advisor how much tax we will have to pay on the profit or capital gain, assuming there is one. Indeed, in some cases the Ayuntamientos punish taxpayers (i.e. vendors) with an unexpected and excessive municipal tax on a non-existent gain when the vendors are selling their property for the same price they paid for it years previously.
Well, now the Spanish Constitutional Court has put an end to this practice in a recent ruling.
The Constitutional Court partly annuls the Municipal Plusvalía regulation.
Date: 18/05/2017
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