The Royal decree law approved by the Government in the Council of Ministers with which the Tax on the Increase in the Value of Urban Land, known as municipal capital gains, is adapted to the ruling of the Constitutional Court will enter into force this Wednesday, after its publication today in the Official State Gazette (BOE).
The decree establishes two options to determine the tax rate that the taxpayer may choose to apply the most beneficial. Specifically, citizens may choose to calculate the amount by the objective result of multiplying the cadastral value by new coefficients that will take into account the real estate reality or they may opt for the calculation through a real profit, with the difference between the sale price and the acquisition price.
In the event that the taxpayer does not obtain a capital gain from the sale of the home, he will be exempt from paying this tax, as explained by the spokesperson. The interested party in proving the non-existence of an increase in value must declare the transfer, as well as provide the titles that document the transfer and the acquisition.
To verify the non-existence of an increase in value, the transmission or acquisition value will be taken as the one that is greater than the one that appears in the title that documents the operation or the one verified, where appropriate, by the Tax Administration, in accordance with the new faculty that is granted to the city councils.
With this decree, the government raises new coefficients that will be applied on the cadastral value and that will be updated annually through, for example, the General State Budget Law.
Specifically, it is established that the taxable base of the tax will be the result of multiplying the cadastral value of the land at the time of accrual by the coefficients approved by the municipalities, which in no case may exceed the limits set based on the number of years elapsed since the acquisition of the property.
As an example, for a period of less than one year from the acquisition of a property, a coefficient of 0.14 is set; for 1 year, the coefficient will be 0.13; for 2 years, 0.15 and for 3 years, 0.16.
Also as a novelty, the capital gains generated in less than a year will be taxed, that is, those that occur when between the acquisition date and the transmission less than a year has passed and therefore may be more speculative in nature. This option is already being applied in some cities.
For its adaptation, the Executive It will give local entities six months to adapt their regulations to the new legal framework. In addition, the decree recognizes the possibility that the municipalities, for the sole purposes of this tax, correct up to 15% downwards the cadastral values of the land depending on their degree of updating. This guarantees that the tax is adapted to the real estate reality of each municipality.
It should be remembered that the high court ruling does not allow taxpayers to claim self-assessments that are already final or that are not appealed at the date of the sentence, so this decree does not have retroactive effects.
The Government defends the regulation via decree law
The Government defends that article 86 of the Spanish Constitution enables it to issue decree laws “in case of extraordinary and urgent need”, as on this occasion.
«The royal decree-law constitutes a constitutionally lawful instrument, provided that, as our Constitutional Court has repeatedly demanded, the purpose that justifies the emergency legislation is to cope with a specific situation, within government objectives, which for reasons difficult to determine. foreseeing requires an immediate normative action in a shorter period than that required by the normal route or by the emergency procedure for the parliamentary processing of laws, especially when the determination of said procedure does not depend on the Government, ”it is noted in the decree .
And it is that the technicians of the Ministry of Finance (Gestha) They see a ‘risk of unconstitutionality’ in the new regulation of the municipal capital gains tax approved by the Council of Ministers through a Royal Decree-law.
The technicians see this risk because the Government has designed one of the essential elements of the tribute regardless of an ordinary law and they recommend that, once it is validated, it is processed as a bill “to eliminate any risk.”