The reform of the Municipal Capital Gains Tax is not something that should surprise us. After all, this tax contributes to the state coffers a total of 2,000 million a year. That is why we should not consider it a tax of minor category, although of course, it does not collect even a tenth of what the income tax of individuals, better known as Personal Income Tax, collects.
What is the Municipal Capital Gains Tax?
The Municipal Capital Gains Tax is levied on the capital gain generated in the sale of a home. Those who receive an inheritancealso have to pay for it.
However, it is a controversial tax since, in practice, whether or not there is a benefit. In addition, it does not seem logical that the person who inherits a property has to pay the tax.
Regarding the jurisprudence, more and more courts are annulling the settlements in which the payment of the tax is required when the operation has become ruinous, that is, it has generated losses.
This tax made all the sense in the world at a time before the crisis when prices were not stopping rising. In this way, the anti-social action of speculation reverted in favor of society through tribute.
However, after the economic crisis and the collapse of the real estate market, the situation was reversed and made this tax completely unfair.
Key aspects of the new reform on the Municipal Capital Gains Tax
The pronouncements of the Constitutional Court, referred to above, that is, that the tax cannot be settled when there is no increase in the value of the property, have had as a consequence the need to adapt the Law to the constitutional framework.
The maximum interpreter of the same has pointed out the unconstitutionality of this precept.
One of the key aspects of this reform of the Municipal Capital Gains Tax is that, to know whether or not there is an increase in value, only the deeds of the first purchase that later happens to the sale must be provided.
That is, if you bought the house for 200,000 euros and sold it for 100,000 by contributing the two public deeds, you can show that there has been no increase in value.
With regard to donations, it should be noted that the real value set by each community in relation to the gift taxwill have to be taken into account.
However, it should be noted that this reform implies a renewal of the concept of surplus value in relation to the previous legislation, so we could point out that the surplus value only exists compared to the previous real estate operation.
That is, if you have not obtained a higher sale value, there is no surplus value.
It remains to be asked what value the value of money plays here, that is, the legal interest of it. For example, if you bought a house for 200,000 and sold for 210,000 10 years later, is there a surplus value?
Common sense seems to indicate that a percentage of 1% cannot be considered surplus value since they are not worth the same in inflationary period 100 euros a year, than 100 the year after.
That is why this hypothesis could be considered as the most adjusted to reality, at least to economic reality in inflationary periods.
Regarding administrative settlements, it should be noted that the deadline to appeal is 1 month,and must provide the deeds -as we have indicated to accredit- or prove the non-existence of the increase in value.
Does this reform favor me as a taxpayer?
Yes, first of all, because you won’t have to pay what you shouldn’t have paid.
However, with respect to final settlements unless pronounced against the Constitutional Court as they have become final, it is very difficult for it to claim the amounts that it has not had to pay.
Except in criminal proceedings and sanctioning procedures, and remember that a tax is not a sanction no matter how much it hurts to pay it, the most normal thing is that the unconstitutionality does not apply to situations prior to the declaration of unconstitutionality by the Constitutional Court.
In legal terms, we could say that, as a general rule, the decisions of the Constitutional Court are not usually retroactive.
Therefore, to point out, by way of summary, that the reform is beneficial for the consumer although it is more merit of the courts than of the State Administration itself.
Despite the collection effort of the Treasury, the courts, as an independent power, have once again ensured our interests and a correct interpretation of the tax rules, so that the taxpayer must pay what he has to pay, neither less nor more. Remember that the deadline to appeal is only one month.