Plusvalía Tax

Have you overpaid Plusvalía Local Tax?

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Do you think that you have overpaid Plusvalía Local Tax? Then keep reading, because this article could save you a lot of money

If you had to sell your property for less money than it cost you, and you paid Plusvalía Tax to your Town Hall, then you could be entitled to a tax refund.

What is Plusvalía Local Tax?

Plusvalía is meant to be a tax on the increase of the urban land value of your property. It is the amount of tax that a vendor needs to pay when selling, donating or inheriting property in Spain and it is worked out by the Town Hall according to its’ own graphs.

Each Town Hall has its own graph of figures used to calculate the Plusvalía Tax and these are different for each municipality.

Plusvalía Tax taxes the increase in the value of land over a maximum period of twenty years from when it is sold, based on the value of the land, quality of the construction, age and location of the property.

The total amount of tax payable could reach 30% of the cadastral value of your land. The Town Hall will send you a letter informing you of the Plusvalía Tax to pay if you did not contact them after completion.

The Good News

Until now, irrespective of whether there was an increase in the value of the land or not, the vendor had to pay Plusvalía Tax.

However, this could change after the new ruling of 11th May 2017, made by Spain’s Constitutional Court, and which declared that if a property is sold at a loss, there is nothing to pay.

Although this has been approved, it cannot be enforced at the moment, until the Spanish courts declare the previous law null and void. This means that, for the time being, local town halls will continue to charge Plusvalía Tax to all vendors, irrespective of whether there is a loss or a gain.

Get your money back

You can claim back the Plusvalía if the property was sold at a loss from May 2013, and you should go for a full refund plus legal expenses. Any Plusvalía Tax paid before May 2013 cannot (at the moment) be claimed back.

Refunds are estimated to be on average 1000€, and there are an estimated 10.000 million euros and more than 550.000 vendors who will qualify for this refund.

In order to make a claim, you must:

  1. Have paid the Plusvalía Tax in the first instance.
  2. Hire a lawyer to lodge your claim.
  3. Be patient.

If you believe that you qualify for reclaiming this Plusvalía tax, it is very important that you claim as soon as possible. You should contact immediately your trusted International Lawyers in order to see if you have a case.

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