Contact us to request a refund of the money unduly paid.

Despite the dead ends established by the Constitutional Court, there are alternative methods of reclaiming money unduly paid for a municipal capital gain.

The owner of the property may request the full amount of the municipal capital gains tax paid if the claim was initiated before the last ruling and has not received a response, the procedure is pending or the tax was paid between 26-O and 9-N.




Capital gains tax: what is it and how to calculate it?

Although technically the Public Administration knows it as the Tax on the Increase in the Value of Urban Land (IIVTNU), it is commonly known as the capital gains tax that is levied on the revaluation that, year after year, homes in our country tend to experience.

It is a tax that over the years has generated many doubts and controversies due to its calculation method, as it obliges the consumer to pay for the difference in price between the purchase and sale of a property, even though this does not exist.

Thus, it is the seller who must pay this tax when transferring a property, while in the case of an inheritance or donation, it is the recipient who is obliged to pay it.

Year 2017: The beginning of the end?

The main reason why the Capital Gains Tax claim has been brought before the Courts stems from the economic crisis that dealt a severe blow to the State’s economy. As a result, it became clear how, when transferring a property, even in situations in which there was a capital loss in that transfer, tax continued to be levied on this tax.

Faced with this situation, in May 2017 the Constitutional Court ruled that the capital gains tax was null and void insofar as it taxed situations of non-existent increases in value, i.e. for cases in which there was an economic loss resulting from a transfer.

A new pronouncement by the Constitutional Court in October 2019 states that the Capital Gains Tax is null and void to the extent that the resulting amount of the tax payable exceeds the amount of the capital gain obtained for the purpose of the transfer.

The Constitutional Court declares the calculation method null and void: a 180º turnaround for the Capital Gains Tax

Despite the delay in declaring this tax null and void in its calculation method, the consequences of this ruling are really relevant from the point of view of legal certainty.

The situation of legal uncertainty that has been created due to the scope of the Constitutional Court’s ruling means that all situations in which the assessment has become final will not be subject to appeal. On the other hand, a tax assessment will be final if no appeal for reconsideration has been lodged within one month or if, if an appeal for reconsideration has been lodged, it has been rejected, either in that instance or in subsequent instances.

The same does not apply to self-assessments, as the local tax that is the subject of this commentary, although it is a state tax, its management and collection is transferred to the local councils, and it is the latter who can decide on the system of settlement or self-assessment.

There is life after the Constitutional Court ruling: we tell you about the options to complain

After several attempts in 2017 and 2019, in October 2021 the tax has been declared null and void by the Constitutional Court after considering that its calculation is unconstitutional, as it does not correspond to reality and affects the principle of economic capacity as set out in article 31 of the Spanish Constitution.

According to the ruling handed down on 26 October, the calculation method used to tax the increase in value experienced by a plot of land from its acquisition to its sale is null and void on the understanding that it was sometimes based on non-existent increases in value.

However, at Jurand Abogados & Consultores Tributarios we know that there is something beyond the dead ends proposed by the Constitutional Court, putting at the service of the taxpayer the method for requesting the refund of the capital gains tax.

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