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Plusvalia tax: Big refunds could be on the way for home sellers over “Wrong tax charge” in Spain

20 Feb
A judge's gavel and a briefcase illustrating tax residence in Spain.
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Big refunds could be on the way for home sellers over “Wrong tax charge” in Spain


Many people have paid a ‘plusvalía’ levy when selling their property, even if its value has dropped, but this might be declared unconstitutional.

After the scandal over the misleading sale of preferential shares in savings banks and the upcoming big payouts to homeowners for ‘floor clause’ interest rate over payments, the next wave of mass financial lawsuits and possible refunds is already on the horizon.


An increasing number of property owners are taking legal action

An increasing number of property owners are taking legal action against local councils over the forced payment of ‘plusvalía’ (increased value) tax when they sell up. Town halls are continuing to charge the seller this tax even if the property is being sold at less or at the same price than the price they originally paid for it. Also, there are cases involving properties in which the sales price was slightly superior to the purchase price but once all the expenses were deducted, there is no gain actually.


The loophole arises as the value of the home that the council uses for it calculation is its ‘valor cadastral’, (official taxable value). Following the pre-crisis property boom, real market values rose well above this official valuation and councils can still therefore keep collecting the money, which is an important source of revenue, even if the seller is losing money.


Legal actions are taken

An increasing number of people are taking legal action against councils. In December, a case was filed against Fuengirola town hall, after a woman who had bought a flat for 220,000 euros and sold for 70,000 euros less still had to pay 5,000 euros of this increased value tax. Our Law firm won this case.

Campaigners against the charges, who are increasing in number, argue that the charge violates article 31 of the Spanish constitution which covers taxpayers’ rights.

In order to study a possible claim, the following documents are necessary:

  • title deed of the purchase
  • title deed of the sale
  • and the proof of value added tax payment.


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