The Constitutional Court has said in a recent sentence that the plusvalía tax goes against the Spanish Constitution. If you have sold, inherited or donated a property in Spain during the last decades, you surely paid for it. Let us explain briefly what has happened.
What is it?
The plusvalía tax is a local tax charged by the townhall on the increase in the value of a property when it is sold, donated or inherited. It is established by national law but collected by the municipal governments, for whom represents their second biggest source of income, only after the land value tax (IBI).
Theoretically, it makes sense to levy a certain sum out of an increase of the assets value. After all, this goes in line with the rest of the tax system. But the question here is rather the how the tax has been calculated these years.
What has been the problem?
The problem has been, according to the Constitutional Court, the way the percentages were applied. The law understood that there was always an increase of value from the purchase to the sell of the property, what caused the sellers to pay for an increase of value that they could have simply not seen in reality.
The issue now is that the tax could still hold, although paralyzed for the moment, if the government tries as soon as possible to change the law and the arithmetic method.
Who can claim their money back?
This sentence does not recognize any retroactive effect, so only ongoing and future claims (those which are still within the legal timeframe to protest) could take advantage of this, but already settled disputes and cases will not reopen. Mainly because, legal procedures aside, this would mean the total bankrupt of a big part of town halls in the country.
Why did it take so long?
The Constitutional Court is one of the main institutions in the Spanish legal system. It is the major interpreter of the Constitution, what makes of it a very powerful entity. But it often takes years to decide upon cases of great national relevance and jeopardizes the very stability of the system it is supposed to look after. For instance, in this case, the law whose articles are being now considered unconstitutional was approved 17 years ago.
This is hard for many people who see now that they have paid thousands of euros in the recent years for an illegal tax and cannot sue anyone for it.
However, if you are still on time to claim, do not hesitate to contact us and we will do the best to protect your interests.
