Was your Plusvalia Tax too high?
Plusvalia Tax (Spanish name for the Tax on the Increment of Urban Land Value), is a direct tax payable to the Town Hall which is accrued when we sell a property. It taxes the increment of the value of the land where the property is built, from the time we buy it to the day we sell it. This tax is compulsory and every property seller has to pay it.
Plusvalia Tax is calculated according to the cadastral value of the land, which has never stopped incrementing even thought the value of urban land has decreased in the last few years.
However, several Superior Courts of Spain, such as sentences 553/2012 of 22nd May 2012 & 310/2012 of March 22nd of the Administrative Chamber of Cataluña Superior Court; sentence 144/2015 of 13th July 2015 of the Nº 3 Administrative Court of Zaragoza; sentence of 26th January 2016 of the Administrative Chamber of Madrid Superior Court and, more recently, sentence 520/2016 of 14th September 2016 of the Administrative Chamber of Valencia Superior Court, have ruled that the system used by the Town Halls to calculate the tax accrued is not correct, as it is based on the land incrementing its value each year and does not consider any other instances. This means that many times this “increment” in value is fictitious and it does not correspond with reality.
So, we have several Court sentences from different parts of the country that have annulled the Plusvalia Tax. These sentences mean that if we have sold our property in the last few years and have paid this tax, we can claim back the money paid in excess to the Town Hall if the land where our property was built had not increased in value.
Unfortunately, this Tax is compulsory, so we need to pay it first and then, if we can prove that the land did not increase in value, we can claim it back from the Town Hall. Or we can claim back the part paid in excess.
Have you sold your property at a loss in the last few years? Do you think that your Plusvalia Tax was too high? Please do contact us. ABC Solicitors‘ Legal Team will review the Plusvalia tax paid at the time and ascertain if you paid too much. If that was the case, of course we can then help you claim it back.
We look forward to hearing from you!