New Rules on Plus Valia

We are looking for some clarification on the very latest ruling on plus valia tax.  We sold our property in Malaga province 10th Novemebr 2021.  We have made a loss after 15 years of ownership.  From what I have been reading in the press we should not have to pay it ?  can anybody clarify this or has the law not been applied yet ?  Also what documents will be required for getting back the 3% retention.  We are being told by our solicitor that we need to supply VAT invoices from the Gestor and Solicitor when buying the property is this correct  ?   

Asking a few solicitors all tell us different things.  We need this to be correct. 

Any help appreciated greatly.  

The constitutional court declared plus valia non constitutional on October 26th. The new law regarding this was passed on November 8th. The court decided any sales during this period would not have to pay any taxes as there was no law in place during that period.

The new law, as published in an Official State Bulleting (BOE) and passed into law on 9th November clearly states that if no profit is made then the seller will not be liable for any of the new plusvalia or CGT tax. 

There are now two ways of paying the tax, either based on the difference of the buying price and selling price or a coefficient of the cadastral value based on how long you've owned the property (the coefficient in my town is 0.08% of the cadastral value after 10 years.). The seller can choose which one to pay so, obviously, in your case you would choose the first option where no tax will be liable.

However, it is up to the seller to prove the price paid as shown in the deeds. IVA or ITP, solicitors fees, notary fees and so on cannot be claimed as part of the purchase price so just the price as laid out in the deeds.

The BOE is at this link New Law Plusvalia/CGT

ETA: The court also ruled that this law would not be retrospective so any taxes completed or agreed before they declared it unconstitutional cannot be claimed back. 

Thank you Maria, so can I just clarify as our solicitor says we have to pay as does an accountant. We purchased in 2006 for €220 euros we sold in 2021 for €19200.  Can we choose not to pay anything ? Our lawyer is holding this money and says we have to pay is this the case ? 
 

You'd really need to sort this one out with your solicitor. Show them the BOE and the rules but I'd be very surprised if they hadn't seen it. 

It may also depend on their interpretation of when you sold, for example the date the sale was drawn up with all the fees rather than the actual date of sale as it may have already been agreed but that would be a bit picky IMHO.

The constitutional court did say that any completed deals would not be retrospective. 

Best of luck on getting your 3% back. It took us over 3 years when we sold a flat.

It has always been down to the seller to find out how much plus valia is owed and to pay it, after completion, so in your situation I would simply not bother even finding out if your town hall expects you to pay or not. Why is your lawyer "holding" any money? The sale proceeds should have been paid directly to you. I would follow mariedav's advice, and insist they transfer the proceeds to you immediately, without any retention for plus valia.

The 3% (assuming you can show a loss / no gain on paper) is almost always paid back within 6 months if a correct application is filed, on time*. Over 6 months, hacienda will have to pay you interest too, hence they usually pay on time, or close to the 6 months. Delays are almost always due to incorrect / late applications. Claiming is straightforward, using form 210. The "VAT invoices" your solicitor is requesting will be simply so that they can include the transfer tax / land registry fees etc. in your original purchase price. These documents are not actually needed by hacienda - unless they have any reason to dispute your claim, but if you are not sure where they are, have a look towards the end of your escritura; you will usually find all associated purchase documents attached. You (your gestor) will need the reference number of the form 211 that the buyer filed when submitting the 3% retention to hacienda.

*the buyer must submit the retention withiin 30 days of completion; the seller then has 3 months from the date the 211 was filed, to submit their form 210

Thank you. 

This message was last edited by andyfamily on 11/14/2021.