PLUSVALIA LOCAL COUNCIL TAX
PLUSVALIA is a Council Rate associated to the sale if a house. It is a cost that always corresponds to the seller in accordance to Spanish Civil Laws. Depending the area, the house sale price, the value being declared when the house was purchased, and the value of the house on your annual Council rates receipt, it is higher or lower in value.
The accrual of the tax and its corresponding payment is different depending on the type of acquisition or transfer in which we find ourselves two types:
- In inheritance or donation processes where the transfer of ownership is free of charge, the person who pays the tax is the purchaser of the land or the person in whose favor the real right in question is established or transferred to.
- In transfers for valuable consideration, by means of a price (sales, exchanges, expropriations, etc.): The person who pays the tax is the selling party of the land or the person who constitutes or transfers the rights over.
The concept of this local tax is taxing how much the land value increase affected the market value of the house, or the land being sold at whatever price was agreed between the parties. It is a local council tax that operates all over the Spanish Territory, and that is due to be paid when a property, land,.. is to be sold at a positive capital gain to the selling party. In other words, the longer that it was since the house was originally purchased, the higher this tax will be since the local public area, and land will have been more and more consolidating in public services provided by the local authorities, meaning an increase of construction value in all the surroundings. The time elapsed from the moment of acquisition of the asset until the moment of its transfer is essential, and it does not keep on increasing after a maximum period of 20 years.
In the event that selling party had no gain at all from selling, there will be no local council tax to be paid as in accordance with Spanish Supreme Court House, and sentence from 11th of May 2017 from the Spanish Tribunal Constitucional (59/2017), and 26th October 2021 (182/2021).
IN SUMMARY, our Firm will assist you through the process to obtain and pay this tax, or will apply for non-applicable in the event that this tax were not to be paid to the Spanish local authorities.
Leave a Reply