When an urban property is transferred, whether due to inheritance, bequest, donation, sale, exchange, etc., the Tax on the Increased Value of Urban Property is accrued, also known as "plusvalía municipal".
This tax is managed by the municipal government and is not based on the actual value of property, but rather calculated automatically based on the cadastral value and the years of ownership. Thus, in some cases where the transfer of the property does not yield any profit, but rather gives rise to a loss, the taxpayer may be required to pay the municipal tax anyway. On 11 May 2017, the Spanish Constitutional Court issued a final decision voiding the duty to pay this tax automatically if the transfer of the property gives rise to a loss. After the decision of the Constitutional Court, the law governing the tax will be amended. Meanwhile, owners transferring an urban property, where the difference between the acquisition value and the transfer value gives rise to a loss, are entitled to claim for a refund of the tax paid. Additionally, taxpayers may also claim for the tax paid in the last 4 years where a loss was made due to the transfer. IVC can help you recover the tax paid, as we can take care of the full process adequately.