Claim for refund of the plusvalia paid when selling a property


23 Feb. 2017

Those who have sold their Properties (urban Plots and/or Houses) in the last 4 years can start a claim for refund of the tax paid to the Town Hall as an immediate action.

A new resolution from the Constitutional Court is expected, declaring unconstitutional some articles of the Act that rules this tax. Given the volume of amounts to be eventually refund by Town Halls, it could be decided the resolution not to have retroactive effects; furthermore, a limitation in time or amount to claim could also be established.

Those who have started the claim prior to the publication of the future Court resolution may not be affected by the restrictions.

Plusvalía Municipal is a tax on the increase of the value of the land but the method to calculate the tax does not take into account if there has been a real increase in value or not. This tax is governed by the Ley de Haciendas Locales, a State Law, and each local municipality is empowered to regulate the tax.

The Constitutional Court has ruled last 16th of February that two articles of the Guipuzcoa Regional Law (Ley Foral) are unconstitutional. These voided articles are the same as in the State Law so it is expected that the same resolution is ruled nation-wise.

To have the chance of a refund, it is required to provide evidences showing that the value of the land has in fact not increased. Selling at a loss has been widely admitted by the Supreme Courts as proven evidence in the last resolutions across the country. Therefore, those who have sold the Property at a loss have a high probability of success in the claim. However, also those who have sold with gains but are able to prove that the value of the land has not increased as much as what the method to calculate the tax states, should also consider the possibility of starting the claim.

The claim for refund of the overpaid taxes according to current legislation and in the absence of the expected future Constitutional Court resolution requires legal court proceedings. The legal costs and the potential costs in case of being condemned to pay the other party costs may discourage taxpayers to claim, especially when the tax paid is lower than the potential costs in case of failure. However, the legal court proceedings are just the last step of the claim that starts with a request of refund to the Town Hall, thus escalating to Court is optional. The immediate goal is to present the claim before the future expected resolution is published, to avoid being excluded.

We shall be pleased to study and evaluate your case. For further information please contact us. 

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