Guide to capital gains: do you have to pay? Is it time to turn? Will they return what was paid? | My Rights | Economy

Announcements for the sale of apartments in the window of a real estate agency in Madrid.
Announcements for the sale of apartments in the window of a real estate agency in Madrid.ZIPI (EFE)

The Constitutional Court has declared null the method of calculating capital gains tax, by which the municipalities charged a percentage of the increase in the value of real estate in the case of sales, inheritances and donations. According to data from the Ministry of Finance for 2019, the 8,000 Spanish municipalities entered 2,501 million euros for this tax.

Specifically, the magistrates have declared unconstitutional, and therefore void, articles 107.1 second paragraph, 107.2 a) and 107.4 of the Consolidated Text of the Local Tax Law, where essential elements of the type are regulated, such as the tax base or the method of calculating the value of the land.

While waiting to know the text of the sentence, of which only one informative note is known, doubts arise about how the news affects the tax situation of each citizen. These are some of the most frequently asked questions and what the experts have to say.

Can city councils collect the tax after the Constitutional ruling?

No. The Constitutional Court has declared null the method to calculate the tax. For Carlos de la Sierra, an expert lawyer in Tax Law at, from now on the consistories cannot “issue settlements to taxpayers until an alternative method is established”, since there is a “legal gap”. The direct consequence is that the administration must stop with the collection.

“Those who sell their houses will benefit from not having to pay this tax,” explains the expert. However, it is foreseeable that this anomaly will not last forever. A few hours after the ruling was known, the Ministry of Finance announced that it would reform the Regulatory Law of Local Finance to save the problem. Until that moment arrives, the consistories cannot claim the payment of the capital gain from the citizens.

Are post-sentence notifications valid?

No. Lawyers point out that post-judgment claims are null and void. This “does not mean that they do not occur,” emphasizes De la Sierra, since the administration may take a while to adopt a new modus operandi.

I received the notification from the city council to liquidate the capital gain a few days ago. I have to pay?

It depends. Lawyers recommend not taking the judgment as a carte blanche to ignore paying the tax. For Elena Valderrama, head of the V&G Law Firm, the ruling would not have effects “on previous capital gains”, although she admits that it is too early to draw conclusions. Faced with the uncertainty, and to guard his back, the lawyer recalls that the citizen “can appeal with an appeal for reconsideration before the city council that issued the notification.” Carlos de la Sierra agrees and adds that, in these cases, “the most prudent thing to do is pay and then claim.”

Can you claim a refund of what has already been paid?

Yes, but each case deserves your study. On this point there are differences of opinion. Valderrama points out that, if profits arose from the operation, according to the informative note it would not be possible to return the amounts, since the sentence does not have retroactive effects; however, he again advocates “waiting for the sentence to be published” to know the fine print of the ruling.

For his part, Carlos de la Sierra raises two scenarios. On the one hand, if the tax was paid through liquidation (the city council demands the collection and raises the amount), in these cases the lawyer believes that “it is possible to claim within a month from the notification.”

In a second scenario, the citizen’s position improves if a self-assessment was chosen, where the taxpayer pays the tax without the intervention of the Administration. In these cases, “the term increases to four years to request the refund of the amounts paid,” explains the expert, which would include the claim for all capital gains calculated under the formula now declared illegal.

This thesis is also defended by the Association of Financial Users (ASUFIN). From his point of view, the TC ruling “opens the door to claim all self-assessments on capital gains of the last four years.”

Will the judgment affect ongoing claims?

Yes. Attorneys agree that the resolution will at least improve the prospects for those who have already started the paperwork. In Elena Valderrama’s opinion, the ruling “would affect ongoing administrative and judicial processes, according to the informative note.” Carlos de la Sierra agrees and adds that the decision of the Constitutional Court will facilitate the procedures for the claimants, since “it will no longer be relevant to prove that there has been a loss in transmission, since the judgment affects the calculation method.”

In addition, the lawyer sees foreseeable that the City Councils will acquiesce in the claims. “In the event that the judicial process was opened because they did not even respond to the previous administrative claim (what is known as administrative silence), they will expressly resolve the open claims to avoid the cost of the judicial proceedings already initiated” , highlights.

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