plusvalia

We are selling our house (bought in 2005) at a considerable loss. However, our solicitor says he must withhold some four thousand euro for the plusvalia tax, which I understand was declared unpayable by Spain's Constitutional Court in 2017 if a property was sold at a loss. Our solilcitor says he will send a letter to the local authority saying we do not want to pay this tax, but the authority has 4 years in which to claim the money. So that's four years of what amounts to nearly four thousand pounds of our money being withheld so that a local council can continue this illegal practice. Why on earth haven't the Spanish legal profession united against this abuse? I believe I read somewhere that although the court has ruled against it, the legislature has yet to embody it in law, so local councils can continue to fleece us. Has anyone else had experience of this, and, if so, how was it resolved?

This article written in March 2017 might go some way to explain the background and why it is necessary to make a claim. (appeal), but it goes on to suggest that in some instances it might not be worth appealing. 

https://www.spanishpropertyinsight.com/2017/03/03/spains-constitutional-court-rules-plusvalia-tax-illegal-property-sold-loss/

In your instance if the claim is for 4000 euros then it sounds as though it might be worthwhile.

I must admit however that it does appear extraordinary that a Constitutional Court ruling can be allowed to be overlooked in this manner by local Governments and that the only way to achieve “ justice” is via an appeal. 

The article identified that back in March 2017 there were 500,000 vendors affected, so you can only imagine what impact this would have on the already overstretched court system in Spain. :(

Or perhaps it doesn’t need to go to court? I wonder if Maria could clarify?

This message was last edited by ads on 22/08/2019.

Well we sold at a loss in 2016. When that rulling was made in 2017 you were allowed to go back 4 years so we had our lawyer put in a claim to the council early 2018. No response at all so now we are paying for a report to show the purchase and sale price and submit that to the courts next month. We have been warned not to expect to see a result for 18 months to 2 years! So don't expect a quick outcome at least not if you are in Benalmadena.

What really surprises me is how little you see this scandal mentioned anywhere.

I have recently sold my villa in Murcia. I received an email from my solicitor asking that I sign and return a document to them that will preclude me having to pay this tax.  I tried to send you a PM but the site would not allow the copy of the document to be attached to the PM.  If you would like a redacted copy of this document I can send it to you in an email should you wish to look at it and perhaps get your solicitor to  submit it on your behalf.

As stated if you PM me with your email I will send it to you.  Its obviously in Spanish and you should be able to open it with any Image viewer.

Regards

Does this mean that by providing the correct document to the authorities that this will circumvent the need for any court action, as the article implied that this was not possible according to the following “It is a principle in Spanish law that you first have to pay the requested tax (or fine) and then file a complaint (appeal). So, if you are selling property now – at a loss – you cannot refuse to pay the ‘Plusvalia’ tax. Only once you pay it can you then raise a complaint seeking a full refund.”

Which of these two options is therefore correct?

The whole thing is nonsense and another Spanish scam aimed at foreigners.

Plusvalia’ tax has always been a made up snide tax. When you buy a property you buy the building and the land, and when you sell it you pay capital gains, so Plusvalia is double taxation. Also what scientific evidence has there ever been to value land separately that has a building on it?

It’s a case of pay what you don’t owe and try and claim it back at your expense, another meal ticket for the lawyers.

One day Spain will pay a price for ripping off foreign investors. ‘’They won’t be any’’.