Dear Partner/ Friend,

The tax on the increase of the value of the land payable to the Town Hall when a property is transferred, known as “plusvalía municipal”, has an automatic system of calculation based on the increase of the cadastral value of the property, constantly updated every year in the State Budgets.

Town Halls must carry out a general revision of the cadastral value of the properties in the municipality every 10 years. But the situation today is that the current real market price of a property can be lower than the revised cadastral value likely based on figures from times when market property value was higher. Actually, sellers might have a real loss on real estate sales, when selling at prices lower than the acquisition ones. 

Some recent news (Cataluña and Castilla la Mancha Courts) stated that the taxable base for Plusvalía Municipal should be the real increase of the value of the land, as it makes no sense to pay taxes on a fictitious gain when there is a real loss, reminding of the rights of the taxpayers where counter-valuations by appraisal experts are required to challenge the values stated by the Town Hall. 

Nevertheless, we do not expect major changes in this sense as Town Hall must raise revenues, so the main alternative for the taxpayer is still the Court appeal when the increase in the cadastral value is not proportionate.

DAVID PEREZ

Real Estate & Legal Assistant

Tel   +34 952 199 111

Mob +34 666 81 81 81

Parque Comercial Miramar (Detail Map below)

Av Carmen Saenz de Tejada, Edf M S208  1º planta MIJAS COSTA 

MARBELLA-MALAGA-CORDOBA-GRANADA-MADRID- PORTUGAL

www.martinezechevarria.com

Gracias al despacho Martínez Echevarría por la información.