Spain Plusvalía tax is not now payable, since 2013, if there is no gain.

by Spanish Lawyer - as credited
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Vendors who since 2013 have sold property at a loss can claim back a full refund on their taxes, plus legal interests.

Spain’s Constitutional Court has ruled that ‘Plusvalia’ tax is 'illegal', since 2013, if a property is sold at a loss.

This ruling from 11th May 2017 states that "the ‘plusvalía’ tax can no longer be charged by town halls when a vendor sells a property at a loss". It has nationwide effect and is backdated to 2013.


Vendors are liable for two taxes:

Capital gains tax (paid to regional Authorities). ‘Plusvalía’ tax (levied by town halls).

This ruling relates to the so-called ‘plusvalía’ tax.

Vendors need to pay this tax, at the time of the sale of any property, which is calculated upon the increase of value in the land.

The tax is payable to the town hall where the property conveyed is located. The Constitutional Court had ruled that some articles of a regional law from the Basque Country were deemed unconstitutional because the wording used in that regions regulation was a word for word copy of national law. If it was unconstitutional for the Basque Country, then it follows that the 'null and void' effects should apply nationwide which is what occured two months later. The new ruling of 11th May has declared, with nationwide effects, that when a vendor sells a property at a loss they are not liable to pay plusvalía tax. THEREFORE AND HOWEVER All vendors who sold property at a loss as from February 2013 can now request a full refund of plusvalía tax plus legal interests THOUGH a lawyer will need to make that claim. An estimated some 550,000 vendors qualify for this refund, who have sold since 2013. Vendors are still expected to pay this tax on selling their property whether they have made a profit or not, because, as yet, law has still not been changed. Spanish Courts, just as in the UK, cannot rewrite tax laws, but may declare them null and void. Tax laws must be repealed, redrafted and enacted by Congress. It is likely to take until a consensus is reached on new legislation and is formally approved by all political forces. In the meantime - as this is Spain - town halls, despite these rulings from Spain’s Constitutional Court, will continue to take the plusvalía tax from property sellers, selling at a loss, as if nothing had changed. It is of course the case that town halls are heavily reliant on the plusvalía tax to finance their spending. They will continue to demand this tax until a new tax law has been approved on the matter. WHAT TO DO (IF YOU SOLD A PROPERTY AT A LOSS AFTER FEBRUARY 2013) Provide us with the detais and our lawyer will lodge an appeal to claw back this tax. Following this new ruling from May, the chances to attain a full refund (plus interests) are now certain. Unfortunately, vendors can only claim back tax dating the last four years. Tax collected before February 2013 is now time-barred by statutes of limitation. In other words, any vendor who’s sold a property at a loss since February 2013, and has paid plusvalía tax, is now entitled to a full refund. The process is not straightforward as it requires the input of professionals. It is not sufficient to show the difference between the buying and selling price, as shown in the Title deeds. A competent law firm has to act on your behalf to claw back this tax. To appeal the tax successfully, there has to be a technical obtained backing up the claim. Buying Distressed Property in Spain – 8th August 2011 Buying Resale Property in Spain – 21st February 2013 Title Deed Explained – 8th April 2013 Nota Simple Explained – 8th April 2013 Bank Guarantees in Spain – 8th April 2013 Buying Off-Plan Property in Spain – 8th of June 2013 Investor Guide to Spain’s Golden Visa Law – 8th November 2013 Bank Repossessions in Spain – 21st February 2014 Buying and Owning Spanish Property through Companies: Pros and Cons – 7th March 2014 How to Buy Commercial Property in Spain – 4th July 2014 How to Buy Rural Property in Spain – 8th August 2014 How to Buy Property in Spain Safely – 10th October 2014 La Complementaria or Bargain-Hunter Tax – 8th May 2015 House Hunting in Spain – 17th June 2015. The New York Times Taxes on Buying Spanish Property – 8th July 2015 Non-Resident Taxes in Spain – 8th December 2015 Resurgent Spain: Málaga Sees Strong Sales – Mansion Global (The Wall Street Journal). December 2015 Snagging List Explained – 28th October 2016 Energy Performance Certificate Explained – 7th November 2016 Buying Property in Spain – 10 Reasons to Hire a Lawyer – 8th November 2016 Selling Property in Spain – 10 Reasons to Hire a Lawyer – 8th December 2016 Buying Property in Spain from a Private Seller (Resale Property) – 21st of February 2017 Spain’s Constitutional Court rules ‘Plusvalia’ tax is illegal if property is sold at a loss – 3rd March 2017 Buying Property in Spain from a Developer (Off-Plan Property) – 8th March 2017


Please note the information provided in this article is of general interest only and is not to be construed or intended as substitute for professional legal advice.

This article has been written based upon information published (this article is not a direct copy) by Raymundo Larraín Nesbitt, and is published by ourselves in line with his conditions of consent (the author is duly credited). Plagiarizing, whether in whole or in part, this article without crediting the author may result in criminal prosecution.

2009 and 2017 © Raymundo Larraín Nesbitt. All rights reserved.


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