This interesting article by Mr. David Mencia, lawyer expert in Real Estate and Tax law, answers that question and clarifies some issues about the procedure to claim.

The tax on the Increase in Value of Urban Land or "Plusvalia Municipal" is levied on the profit obtained as a result of the transfer of a property either by sale, inheritance or donation and is paid, in general, by the seller, heir or donee.

Since 2017, the Spanish Constitutional Court and the Supreme Court have issued several rulings in favour to taxpayers and agree that situations of non-existence of increases in value of the property or those in which no gain has been generated in the transfer of the property cannot be subject to taxation. In these cases, the taxpayer may urge before the corresponding Town Hall the refund of the amounts paid for this tax or submit a letter communicating that this increase has not occurred and that, therefore, the liquidation of this tax does not proceed.

In these cases, and for the purposes of requesting the refund of the amounts paid for this concept, the taxpayer must accredit the non-existence of the increase in value by any means of proof, being the most convenient to use an expert report or the public documents of acquisition and transfer of the property.

For practical purposes, it should be noted that the request for refund of the "plusvalia municipal" paid in cases of transfer with losses is handled differently depending on whether the tax has been paid by the taxpayer or whether, on the contrary, it has been paid by means of a liquidation issued by the Town Hall:

1. If it has been the taxpayer himself who has settled the tax, he may file a claim before the corresponding Town Hall requesting the refund of the amount unduly paid. A period of four years is allowed from the presentation of the liquidation.

2. If it has been the Town Hall who has liquidated the tax and has sent the corresponding liquidation to the taxpayer (as it happens in most of the Town Halls of the Costa del Sol), this one will be able, in the month following the reception of the liquidation, to present the corresponding appeal before the corresponding Town Hall in order to dispute the above-mentioned liquidation if no appeal has been filed requesting the non-assessment of the tax in the absence of gain.

Finally, and as a conclusion, it is very important to respect the established deadlines because, if an appeal is not filed within the legally established period, the resolutions become non-appealable.

For questions, clarifications or inquiries, please do not hesitate to contact Mr. David Mencia on the address below, by email or telephone:

C/Marqués del Duero, 84 3º B. 29670 San Pedro Alcántara

T.: (+34) 952 92 86 72

E.: david@davidmenciaabogado.com

W.: www.davidmenciaabogado.com