The Constitutional Court eliminates the Municipal Capital Gains Tax.28 October 2021
We would like to share an informative note from the Constitutional Court in which it anticipates the dispositive part of the Sentence of the Plenary that declares the unconstitutionality and nullity of articles 107.1, second paragraph, 107.2 A) and 107.4 of the Revised Text of the Law of Local Revenues, referring to the municipal capital gains tax. As could be observed in the note, the Court considers the aforementioned precepts unconstitutional and null since they establish an objective method for determining the taxable base of the Capital gain Tax on the Increase in Value of Urban Land which determines that there has always been an increase in the value of the land during the period of taxation, regardless of the existence of this increase and the real amount of this increase. In other words, the application of the articles declared null and invalid implies that the municipality always generates the municipal plusvalia regardless of whether or not the value of the transferred land has increased since the acquisition.
Based on this pronouncement of the Court, it would be possible to examine and, if applicable, appeal the capital gains liquidations calculated on the basis of the precepts declared null and invalid ,therefore, Pérez de Vargas Abogados is disposed to clarify any possible doubts and to analyse each particular case.