Hi All,

Selling our property and have been advised by the agent that they will hold the plusvalia tax value in their account until the town claim it. We sold at a loss so shouldn't be paying anything logically but believe we have to. My issue is why would the agent be holding it? Is the process not to pay and then launch an appeal under no profit made heading within the next 4 years? This doesn't sit right with me at all. Any feedback would be greatly appreciated.

Thank you

Hello Bon and welcome.

The first thing you have to appreciate is that this is Spain** EDITED - Against forum rules **

There has been a lot published about plusvalia tax and the Supreme Court has ruled it is illegal where you sell at a loss. However the local town halls are having none of it and totally disrespecting the rule of law, nothing new there. It’s a case of paying it and trying to claim it back within a few years.

As for paying it to an Estate Agent, ** EDITED - Against forum rules ** and have no right or authorised to hold clients money, that includes plusvalia tax, deposits or any other made up fraud. What happens when the Estate Agent does a runner with your money?** EDITED - Against forum rules **

Refuse to pay it to anyone. What does your lawyer say.

Estate agents are unregulated in holding any client funds. You may as well hand your money over to the Lucky Lucky man at the beach.

Unfortunately according to  this you cannot refuse to pay the Plusvalia tax ....

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

"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.”

1. The town hall will not "claim" the plus valia; it is up to you, the vendor, to pay it within 30 days of the sale. Failure to do so will result in fines being imposed.

2. Do not trust any agent to "hold" your money or pay your taxes on time on your behalf; if you don't have a legal representative, just go to the town hall and request the bill and then pay it yourself.

3. Ask your legal representative to make the claim for a refund - but work out first if the cost of doing so will be worth it.

   ‘’1. The town hall will not "claim" the plus valia; it is up to you, the vendor, to pay it within 30 days of the sale. Failure to do so will result in fines being imposed.’’

What happens to the fine if you are calling it a day and going back to Blighty?

If the vendor is non-resident, the notary may advise the buyer to retain the amount of the plus valía pending confirmation of payment; or the buyer may deduct the amount from the sale price and agree to pay it (which will be stated in the escritura).

If a non-resident fails to pay, the town hall are more likely to chase the new owner for the debt than try to pursue a debtor overseas. Ultimately, the debt will stick to the property, so it's in the interest of the buyer to make sure it's paid one way or another

‘’Spain’s Constitutional Court rules ‘Plusvalia’ tax is illegal if property is sold at a loss’’ 

So is the town hall superior in law to the Constitutional courts?.

Obviously not, but since when did town halls in Spain stick to the law? Or has something changed that I haven't heard about?

Presumably the loss element has to be approved first?

So it's back to requiring legal proof ( evidence based)?  ...lawyer or notary at point of sale? What evidence would suffice? Might this be an option to get around having to put in a subsequent claim?

Does the legal Escritura not have the selling price and the history of the previous purchase price? Perhaps the whole Plusvalia’ tax is just another town hall earner. It is a shame that Spain is such a beautiful country but seems to be riddled with swindles where the authorities and justice system appear to refuse to abide by court rulings, laws and regulation.