That is correct

and the councils still demand payment despite ruling

it just seems a bit worse because your not even realising an asset 

So that everyone is aware (and there are a lot of things we do not know about) the following from the CAB Spain site.

All heirs are allowed six months to pay the plusvalia. Should one need an extension to pay these taxes, the application must be made in writing with a stamped copy retained. An extension will be granted facilitating staggered payments. The interest is nominal. This is not the case the appeal for the extension has not been solicited, the interest will begin to accrue daily. In this particular case, the person in question is paying an amount daily. This does not halt the expensive surcharges and interest being added daily. This would not have been the case if as stated earlier, an extension had been applied for before the final period of payment.

For further information, please email one of our lawyers direct.

juan.espejo@citizensadvice.org.es

The Spanish death tax.  

Not only will Spain have primitive and punitive property buying laws, they will kick you in the proverbials when your most vulnerable.  When you lose your loving partner. 

Still want to move there?

C'mon Spanish Govt...this is false economy and these sorts of anomalies and injustices are doing a grave disservice to Spain and citizens alike.

IT DOESN'T HAVE TO BE THIS WAY.....

Our local friendly agent just posted this on her Facebook page:

Hacienda agrees with the mayors on the reform of the capital gains tax

The new standard will leave sales with losses free and will update the value of the properties annually

https://elpais.com/economia/2018/01/18/actualidad/1516303654_706742.html?id_externo_rsoc=FB_CC

The translation is a little misleading - it should say Hacienda reached an agreement with the mayors, rather than suggesting that the mayors are happy with the new ruling! Minor point, and it's obviously good news - but there are still a few questions to be answered (from just quickly scanning the article in El Pais). 

For a start, why is the ruing not effective immediately, rather than "from next summer"? And for existing claims, nothing much has changed - so sellers like the OP will still have to start, or continue with, their legal battles for refunds.

There's mention of reviewing the valor catastral (land values) annually, in order to ensure that these reflect market conditions - but no suggestion of how that will be achieved (or monitored for accuracy & relevance to actual market values) - and since the IBI (rates/council tax) are calcualted based on the valor catastral as well, if it's revalued downwards, then presumably people's IBI will fall as well? But then, how are local councils going to make up the defecit? (Maybe the days of people on forums like this saying "move to Spain, you'll save a fortune in council tax!" are numbered) Indeed, how are they going to recoup the reported €2,500 million that they currently rake in from Plus Valia? I'm guessing in the form of a share of the transmission tax on property purchases in their municipality from Hacienda - who presumably will then need to increase transmission tax to keep their own coffers in order. It's already between 8-10% - how much more can the market sustain? The article admits the new ruling will be a patch until the govt. comes up with a better idea for reforming local funding. Hmmm....

And then there's mention of purchases and sales taking place within one year, which previously have been exempt from plus valia, no longer being so. Lots of people made quick profits during the boom (guilty, Your Honour) doing this (e.g. "flipping" off-plan property), but even if they had been subject to Plus Valia, it wouldn't have amounted to much, and still wouldn't, even if the valor catastral is reviewed annually, surely? Buy & sell before it's been reviewed, and there won't be any gain. So what, exactly, are they suggesting here? An arbitrary sales tax based on nothing at all? Will Plus Valia just end up being replaced by another tax with another name?

And finally there's some mention of exempting inheritances (& donations) from plus valia - but incorporating the (perceived or actual) gain into the relevant tax declarations of the beneficiary - I'm not entirely clear what the article means on this point. 

But on the face of it, it is good news - isn't it?

Not good news if the courts are already overstretched and under resourced as this will only exacerbate the problem of excessive delays. Or will this be dealt with by the small claims courts?

Just a quick comment, I have only had a quick glance at the info so I may have missed something important.

But Plus Valir is a town hall tax and nothing to do with Hacienda

Whereas, Capital gains tax is on the purchase/sale of the property and that is Hacienda tax and nothing to do with Plus Valir.

On the valor catastral.  If it's revalued downwards, then I would asume they could charge a higher percentage, even over 100% as was the case years ago in UK with rateable values .

The good news, ads, is that this "agreement" means future cases won't have to go to court - anyone selling at a loss will simply have to prove that to their town hall, and then there will be no plus valia charged. It's only existing claimants (who have sold since 2013, I think) who will still have to pursue their case through the courts.

John, I think the point is that plus valia is a tax, whatever anyone else wants to call it, and tax matters are usually dealt with by hacienda - which is why, after the constitutional ruling recently that a tax cannot be charged where no gain has been realised, hacienda has "negotiated" with town halls to bring this unfair (unconstitutional) situation to an end. The article seems to suggest that hacienda (central govt. in other words) will work with town halls to compensate them for the loss of income from plus valia - without which, most would probably go bust.

Thanks Roberto I was sure you would know 

Why can't existing claimants use the same process with the Town Hall to " simply prove they sold at a loss" to spare the need to go to court?

Because that's not what has been agreed.

This is Spain

Totally illogical inefficient but more importantly it appears to encourage litigation rather than look to productive ( and fair)  ways of alleviating a justice system that is currently under great stress.

We sold in May 2017 after the Spanish ruling and argued as we had sold at a loss, we shouldn’t have to pay PlusValia Tax.  We were told we had to pay and then claim it back.  We paid almost €3000 in PlusValia Tax.  Our lawyer made our claim to the local authority (San Javier) and had to wait 6 months for it to be ignored (and it was) then our lawyer submitted another claim in February 2018, during which they had two months to respond (and didn’t).  Now we have to pay €350 plus IVA for an architects report on the land price (?) plus lawyers fees to go to court (still trying to get a figure for this).......

We have been told by our legal firm that these expenses are not recoverable if we win - in other words we’ll probably get half, if we’re lucky.  We have also been told, by another source, that these expenses incurred will be added to our claim if we win.

Who is correct?  Anybody know?

It’s almost a year now since this process began and I think most folk would have thrown in the towel by now.  But I intend to see it through - just wish I knew what the law says in these cases regarding incurred expenses.  Thx

I was advised by my lawyer not to try  and reclaim plus valia on my situation 

while it’s under appeal there’s little chance  and even then it will be an expensive process 

only hope is that once it’s confirmed that the plus valia. Payments are illegal then certain lawyers will operate the same system as they have with getting people’s money back from off plan deposits on a no win no fee basis but take a percentage

So I’m also going through the same process, lawyer is charging me 200 plus IVA initially, then if the town hall contest the issue then 350 plus IVA to go through the litigation process: If the town hall want a price for the land or any other survey, the town hall pay, not the claimant. It can take up to 12 months, but it’s pretty straight forward unless you have not paid the relevant income taxes or rubbish collection charges etc

We sold in May 2017 after the Spanish ruling and argued as we had sold at a loss, we shouldn’t have to pay PlusValia Tax.  We were told we had to pay and then claim it back.  We paid almost €3000 in PlusValia Tax.  Our lawyer made our claim to the local authority (San Javier) and had to wait 6 months for it to be ignored (and it was) then our lawyer submitted another claim in February 2018, during which they had two months to respond (and didn’t).  Now we have to pay €350 plus IVA for an architects report on the land price (?) plus lawyers fees to go to court (still trying to get a figure for this).......

We have been told by our legal firm that these expenses are not recoverable if we win - in other words we’ll probably get half, if we’re lucky.  We have also been told, by another source, that these expenses incurred will be added to our claim if we win.

Who is correct?  Anybody know?

It’s almost a year now since this process began and I think most folk would have thrown in the towel by now.  But I intend to see it through - just wish I knew what the law says in these cases regarding incurred expenses.  Thx

What  is Plusvalía tax?
The Plusvalía (or Tax on the increase of value of the lands of urban nature) is a municipal tax that taxes the profit obtained with the sale of a property, taking as references of the calculation, the original acquisition value and the price at the time of sale.
What can I claim?
If you sold at loss but still were forced to pay a tax to the Local Council in the last for years, you can claim that tax back.
Is it a safe action?
It is, after this recent decision by the Supreme Court where this Court states that when there is an increase in value, it must be taxed according to the objective rules of the tax, and if there are losses, there is no taxation possible.
Should the tax be presented and liquidated, in any case?
Yes, sellers are obliged to present liquidation where they accredit this principle of proof that there is no increase in value.
It will be difficult to prove to the judge this situation of losses?
No, after this Decision by the Supreme Court as the High Court has affirmed that the deeds of purchase and sale are sufficient to prove the loss without ruling out the expert report. If the Administration has something to oppose, it must prove it. That is, Supreme Court places the burden of proof in favor of the taxpayer. 

You can contact us for free appraisal of your claiming possibilities. NO WIN NO FEE service.
 

Am I correct in understanding, therefore, that as long as you can prove that no gain has been made, you will still have to present some form of documentation to your town hall, but you will not have to pay any Plus Valia, and therefore will not have to claim it back through legal means?

So, we know now that if you genuinely sell your property at a loss, you are not liable for any form of tax on a non-existent gain. Long overdue legislation....but, OK.

So what happens if you sell for a very small "profit", for example €2.000, but due to the time you've owned the property, the Plus Valia charged by your town hall is greater than the gain you've made, say, €3.000 ????? As we know, Plus Valia is calculated in a way that is totally unrelated to market values, so I think this is a perfectly feasible scenario, which means you could effectively be taxed (in this simple example) at 150% 

Isn't it time that this heinous municipal tax is simply outlawed altogether?

Yes, you can oppose the tax value that the administration gives to your property as they ae basing their calculation on cadastral value which, after the real estate crisis it  frequently higher than the current market value. In those cases,  it is necessary to present a contradictory appraisal that expresses the real value of the property in order to pay fair taxes. .

So, for a short answer to your question; yes, you can formulate a claim  even when you are gaining with the sale if the gain the administration is stating is not correct.

In 2007 we purchased an apartment near Tarragona and sold it two years ago for less than half what we paid. We weren't there for sale but had a family member with our POA sign the papers for us. For unknown reasons, the notaria deducted federal and municipal capital gains tax (plus valia). We eventually received a refund from the federal treasury, but for some reason, the plus valia went to a huge multinational company, INDRA. Our first lawyer lost interest after getting no response to a threat to sue INDRA, and our second is having similar issues getting any response from them. Is there anyone with a similar experience who can advise us on how we can recover the plusvalia? Thank you.