Plusvalia tax is canceled

Posted: Sat Oct 30, 2021 7:51pm

2 replies234 views3 members subscribed

Apple96

Posts: 9

1 helpful points

Location: Torrevieja

Joined: 1 Oct 2021

Hey Guys,

do you listen to the new Constitutional Judgment? As you can read here https://www.abc.es/economia/abci-que-debes-hacer-si-tienes-pagar-impuesto-plusvalia-municipal-nsv-202110281128_noticia.html

the plusvalia tax is going to be changed or canceled.

I never understood why people had to pay this tax. The tax was never bound to the real market situation. If I understand it correctly, all gave away -, inherited and sold houses after the 26th October don't have to pay the plusvalia tax.

What do you think about it? Does the Government replace the plusvalia tax or is it really canceled?

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Posted: Sat Oct 30, 2021 10:51pm

Kimmy11

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Posts: 6872

12569 helpful points

Location: Formentera Del Segura

Joined: 8 Aug 2017

Posted: Sat Oct 30, 2021 10:51pm

Hi Apple96,

It's about time PlusValia is overhauled. It would have been acceptable had it been based in fact, but to allow almost entirely arbitrary calculations to be set by the Town Halls, so long as they didn't exceed the maximum percentages set out in state law, always felt unfair and could produce a very nasty surprise for sellers and inheritors.

That said, this municipal tax has been a lucrative source of income to the Town Halls, so we may need to wait and see whether it's varied or replaced by our regional government. It's also worth noting that where this article talks about "capital gains tax", it's important for readers to bear in mind that this refers to the potential abolition of the implied capital gain on the value of the land, not the property itself - the latter will still attract CGT if the property is sold at a profit (less costs).

Kind regards,

Kim

Posted: Sun Oct 31, 2021 10:15am

killjoy

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Posts: 3230

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Location: Orihuela Costa

Joined: 4 Nov 2017

Posted: Sun Oct 31, 2021 10:15am

To compensate this subtantial loss of revenue (up to 30% of their budget) Councils will have to look for "other sources", most probably a considerable increase of the IBI and/or requalification of soil and it's use.