The Constitutional Court has declared unconstitutional part of the Tax on the Increase in Value of Urban Land, better known as the Municipal capital gains taxl. The judgment of October 26, 2021 considers that the system envisaged by the Local Finance Law to calculate the lien is unconstitutional. The Court argues that the objective method for determining the taxable base of the tax affects the principle of economic capacity by assuming that there is always an increase in the value of the land throughout the tax period, regardless of the actual amount of the increase.

For practical purposes, the annulment of the tax means that from now on the municipalities will not be able to collect the municipal capital gain, unless in the future a new formula is established that conforms to the doctrine.

Can I recover the amount already paid from the municipal capital gain?

The measure does not have retroactive effects and, therefore, the firm situations existing before the date of the sentence cannot be claimed as a general rule.

However, there are specific situations in which the amount can be recovered:

  • If you have made the self-assessment of the tax, you have a period of four years to request a refund.
  • If the settlement has been processed by the corresponding City Council, you have one month to submit your claim.
  • In the cases in which a claim or an appeal prior to the sentence is open, that is, in situations that are not final, the claim may also be made. In the event that the City Council is in the process of liquidating the tax and its valuation is not yet closed, it will also be possible.

Therefore, all the settlements that have not been contested before the date of the sentence and all the situations that have already been judged or resolved by the Administration will not be able to claim the reimbursement of the amount, unless it has made the self-assessment of the tax in the last four years or the liquidation of the City Council has been carried out in the last month.

Warning: This article is not personalized tax advice. For more information contact a tax agency or our Notary in Barcelona.