{"id":4676,"date":"2017-05-23T08:47:43","date_gmt":"2017-05-23T08:47:43","guid":{"rendered":"https:\/\/www.powersabogados.com\/en\/?p=4676"},"modified":"2017-05-24T12:20:48","modified_gmt":"2017-05-24T12:20:48","slug":"plusvalia-municipal-find-can-claim-reimbursement","status":"publish","type":"post","link":"https:\/\/www.powersabogados.com\/en\/real-estate\/plusvalia-municipal-find-can-claim-reimbursement\/","title":{"rendered":"Plusval\u00eda Municipal: find out if you can claim a reimbursement"},"content":{"rendered":"

[et_pb_section fb_built=”1″ custom_padding=”0px|0px|54px|0px” admin_label=”section”][et_pb_row custom_padding=”28px|0px|27px|0px” admin_label=”row”][et_pb_column type=”4_4″ parallax=”off” parallax_method=”on”][et_pb_text admin_label=”Texto” text_font_size=”24px” text_line_height=”1.2em” header_line_height=”1.1em” custom_margin=”|||” custom_padding=”20px|||” saved_tabs=”all”]<\/p>\n

Because of the economic crisis the evolution of the value of urban land is not always upwards, as is presupposed by the Tax on the Increase of Value of Urban Land (IIVTNU), better known as Plusval\u00eda Municipal<\/i>. This issue is precisely the one that the Constitutional Court deals with in its recent judgments of February 16, 2016, March 1, 2017 and May 11, 2017, opening the possibility of claims. Find out if this is your case.<\/b><\/span><\/p>\n

[\/et_pb_text][et_pb_text admin_label=”Texto” text_font_size=”16px” header_line_height=”1.1em”]<\/p>\n

What is Plusvalía Municipal and how is it calculated?<\/b><\/span><\/h2>\n

<\/span><\/p>\n

The Plusvalía Municipal<\/i><\/b> taxes the increase in the value of urban land<\/b> when the ownership of a property is transferred for any reason (sale, inheritance or gift) or when any right of enjoyment or limit of ownership of property is established.<\/span><\/p>\n

It is a local tax that is levied by the City Hall of the town where the property is located.<\/span><\/p>\n

The calculation of the tax is based on the land cadastral value of the property transferred, the number of years it was owned (a minimum of 1 year and a maximum of 20 years) and a percentage applied by each Town Hall. A tax rate is applied to this base resulting in the tax payable.<\/span><\/p>\n

This formula, in practice, means that the Plusvalía Municipal<\/i> is <\/b><\/span>always positive<\/b><\/span>, regardless of whether the increase in value actually occurred<\/b>. That is, you always have to pay the tax even if the land has lost value, a circumstance which is not infrequent because of the crisis.<\/span><\/p>\n

However, recent judgments of the Constitutional Court<\/b> affirm that when real estate is transferred which has not increased in value, the tax is actually a legal fiction according to which the mere ownership of a land generates a tax at the time of transfer regardless of the actual circumstances of each case, assuming an increase in value subject to taxation, which goes against the principle of economic capacity.<\/span><\/p>\n

Upon publication of the Constitutional Court judgment, the law will have to be modified for situations where there is no increase in the value of urban land. <\/span><\/p>\n

The following question is obvious.<\/span><\/p>\n

Can I claim reimbursement of the Plusvalía Municipal<\/i> I have paid in excess?<\/b><\/span><\/h2>\n

<\/span><\/p>\n

If you sold property for less than when you acquired it, for example during the real estate bubble, selling it during the economic crisis, most probably you are elegible for a refund.<\/span><\/p>\n

To claim the reimbursement of the Plusvalía Municipal<\/i><\/b>, first check two important issues<\/b>:<\/span><\/p>\n

First, your loss<\/b> as demonstrated by an appraisal.<\/span> It should also be considered whether the cost of the claim compensates the amount to be recovered.<\/span><\/p>\n

Second, not more than four years have passed since the transfer of the property<\/b>. After this time the action is time barred.<\/span><\/p>\n

Once you have verified those two requirements, you can file the claim by submitting a form requesting rectification and refund<\/b> to the City Hall where you paid the tax.<\/span><\/p>\n

In its decisions the Constitutional Court does not clarify the procedure to document that there was no gain upon transfer, but based on the documents submitted in the lower courts with the result of its favorable decisions, the following documents should accompany the claim: <\/span><\/p>\n