In Spain, paying taxes is an imposed religion and as announced Pedro Sanchez With much noise a few weeks ago, everything indicates that in the coming months we Spaniards will have to dig deeper into our pockets. The Administration is preparing another increase in personal income tax and these taxes must include those that we also pay at the local level, such as municipal capital gains. A ruling by the Supreme Court states that local councils must proceed to reimburse this payment if certain conditions are met.
First of all, we need to be clear about what municipal capital gainsthe tax paid at the local level to municipalities. Its original name is Tax on Increasing the value of urban natural assets (IIVTNU) and taxes the capital gain on urban land at the time of its transfer. In other words, this tax appears when the land is transferred, whether it is built on or not. When it comes to the transfer of a dwelling, this tax must be paid because the land is transferred, whether the dwelling is modified or not. Since its introduction, this tax has been levied on transfers of houses, apartments, garages or premises.
Therefore, a person will have to pay the municipal capital gains at the town hall in the event of sale, donation or inheritance of a property. In the event of sale, the payment period will be 30 days, while in the event of inheritance it can be up to six months. Logically, the person who must pay the taxes is the buyer in the case of a purchase and sale and in the case of an inheritance or donation, the people who receive it.
In this way, this tax taxes the added value of the land itself from its acquisition to its sale and to calculate the tax, two concepts are taken into account. On the one hand, the cadastral value at the time of transfer to check the value of the land as well as the tax rate, which is information that the town hall values depending on the location of the land in question.
The Supreme Court and Municipal Capital Gains
THE Second Section of the Third Chamber of the Supreme Court A few months ago, he issued a ruling that will establish a case law and mark a before and after in the matter of municipal capital gains. High Court stated at the time that what was paid in municipal capital gains can be recovered at sales without any increase in value, even in the event of a final settlement.
The sentence of February 28, 2024, published by the magistrate Rafael Toledano Canterostresses that the municipalities may be asked to reimburse the amount paid plus the corresponding interest since in the case of transactions in which there was no capital gain, a profit that did not occur was paid.
According to the website of the Spanish lawyersin this ruling “considers that in these situations there is a violation of the principle of economic capacity and the prohibition of confiscation guaranteed by art. 31.1 of the Spanish Constitution, and that the Constitution itself requires that they remain without effect, as far as possible, since they are the effects of the application of an unconstitutional law.
In this way, people who sold the house once and did not make any profit and still paid the capital gain to the city council, according to the Supreme Court, are entitled to recover the amount paid plus some interest.
How to request the restitution of municipal capital gains?
The steps to be able to request the restitution of the municipal capital gain if you meet the conditions are simple: the first thing to do is to submit a letter to the town hall demanding the rectification and restitution of the capital gain.
In the event that the council ignores and rejects the request, the second step is to appeal and if this is unsuccessful, the third and final step is to go to court. The injured parties will therefore have to file a contentious-administrative appeal before the Superior Court of Justice of the corresponding autonomous community. Given the Supreme Court’s ruling, you will have everything to gain.
