The Constitutional Court (TC) annulled the Tax on the Increase in Value of Urban Land a few days ago – popularly known as municipal capital gain – when there is no such revaluation in the transfer of a home.
Faced with this ruling, which referred to the provincial law of Guipuzcoa that is identical to the state, many taxpayers who sold their home with land losses may appeal the tax before the courts. In what cases? As long as the self-assessment is not time-barred (i.e. if four years have not passed, unless the municipality has issued a settlement). In this scenario, if the claim has not been appealed within one month, it could pose more problems.
What happens when a property is sold with losses but the land has not depreciated?
“If a taxpayer has sold far below market, we can consider that operation to be fraudulent. With which we understand that taxpayers who purchase real estate between 1998 and 2007, at the height of the real estate bubble, are the most likely to have successful claims,” says David Garcia, tax manager of Ayming.