Sell your property – How to claim the Plusvalía tax

If you sell your property in Spain, the Plusvalía (a local tax) applies, it has to be borne by the seller, before it was passed on to the buyers, but that is no longer the case. This tax must be paid by the seller.

In recent years, due to the decline in prices caused by the Spanish real estate crisis, we have noticed that many of the sellers have sold at a loss! Which effectively meant that she could have asked for several thousand euros for a property.

A recent judgment of the Spanish Constitutional Court announces the end of this practice. The Constitutional Court has stated that this formula does not conform to the Constitution and enforces partial legal reforms.

The tax is applied when you sell a property profitably and you have to pay a percentage for that margin.

The taxable profit is multiplied on the basis of a fixed percentage by the current cadastral value of the property, which is calculated multiplied by the number of ownership years.

Plusvalía is a tax levied to increase the value of the urban land, not the cost of construction, occasion of its transfer. It is assumed that the land is urban if it falls into this category of cadastre law.

Property transfers are the main type of transaction that leads to the tax, but not the only one. Should a price arise, Plusvalía will be paid by the person transmitting the consignment of the property; if no price is involved, the person who buys the property is responsible for paying the tax.

If a property is transferred by a non-resident natural person, there is an exception. In this case, most of the buyer’s lawyers will choose the amount owed in Plusvalía Municipal, which will be deducted from the purchase price so that they can be sure that it will be paid. As if the seller will disappear and there is a pending bill against the property, no matter who the owner is!

If no profit has been made by selling the property, you can request a refund of the paid withholding tax.

After receiving your “severance pay”, you will either have one month to file a complaint, or up to 4 years to claim the unduly paid tax, whether you have received a bill from the tax office or made a self-assessment ,
If you receive a “Billing” now we recommend that you challenge them. All that is needed is someone to present it in your name and a copy of the title of the original property when you have bought and the new title of the property when you sell.

Please contact us for a free consultation. At MPDunne – Hamptons International, we are always happy to help our customers save money !!!