The municipal capital gain on property sales with losses
Any transfer of property, whatever the result obtained by the seller, is being required by municipalities for the Tax Increase in Value of Urban Land (better known by Plusvalía Municipal). Given the increase in assessed value of property, which increasingly often exceeds the market value, this tax has become a priority for municipalities and assess an issue for marketers, especially when selling causes losses.
If, according to the definition of taxable transactions, the economic capacity levied on the Municipal Capital gain is “the increase in land value experience” it should be clear that when there are losses, the tax should not be accrued. However, municipalities, based on the methodology of determining the tax base (under Article 107 of Legislative Decree 2/2004 Real governing the revised text of the Law Regulating Local Tax, hereinafter TRLRHL) stresses unconditional accrual.
As a result of the appeals lodged by sellers, both in cases of loss as in those in which the gain was much lower than that required by municipalities, various Courts and Courts of Justice they have been saying about giving them why taxpayers. It may be noted, however recent, the judgment of the Court of the Contentious # 4 of Valladolid of 31 July 2015 which estimated the return request taxpayer who had paid the tax from the City of Valladolid.
The judgment of the Court of Valladolid maintains the same criterion as stated by the High Court of Justice of Catalonia, Madrid and Valencia or by the Administrative Courts of Alicante, Madrid and Zaragoza. Special mention should be made to Order of 5 February 2015 the Court of Administrative Litigation of San Sebastian which has raised the question of constitutionality regarding the formula for calculating the tax base, Article 107 TRLRHL and Article 110.4 of TRLRHL, before the Constitutional Court, it is having been declared admissible and being pending.
Since the judgments produce effects only in favor of those who have claimed, who has been affected by this issue should begin, if deemed appropriate, the corresponding procedure must claim in court and justify the loss to choose to recover or not to pay the amount Municipal Capital Gains and will be the judge who ends estimating or not each specific procedure.