Approved the new capital gains tax appropriate to the Constitutional ruling

The Council of Ministers has approved this Monday a Royal Decree-law to reform the articles that have been declared unconstitutional in the Tax on the Increase of the Value of Urban Land, known as municipal capital gain, which taxes the revaluation of real estate.

The final text is adapted, in this way, to the sentence handed down this week by the Constitutional Court, which annulled several aspects of the tribute -which is paid when someone sells, donates or inherits a home-, by virtue of which it was always necessary to pay it, regardless of whether there had been a true increase in value and the fee could be excessive. The method of calculating the tax base led, according to the magistrates, to a result that deviated “notably” from the real values ​​of properties in the real estate market.

Thus, the reform approved today clearly establishes that operations where there is no increase in value will not be subject to taxationny that it must be verified at the request of the taxpayer that no profit has been obtained.

In case of profit, the calculation method will be optional, with which the taxpayer will be able to choose between paying according to the new objective system, which will adapt to the evolution of the real estate market, or based on the real capital gain. In this way, the taxpayer may claim that the real capital gain is applied if the difference between the transfer value and the acquisition value is less than that resulting from the objective estimate.

The applicable annual percentages on the cadastral value of the land are replaced by some maximum coefficients, depending on the number of years that have elapsed since the operation.

The municipalities will have competence to lower these coefficients, while they may also lower cadastral values ​​by up to 15% to ensure that the tax is adapted to the real estate reality of each municipality.

By this method, the taxable base of the tax will be the result of multiplying the cadastral value at the time of accrual by the coefficients approved by the City Councils.

The maximum coefficients established in the state regulation range from 0.13 when one year has elapsed since the purchase to 0.45 when 20 years or more have passed.

These coefficients will be updated annually in the general state budgets based on the evolution of the real estate market.

As a novelty, capital gains generated in less than one year will be taxed, that is, those that occur when less than one year has elapsed between the acquisition and transfer date and which, therefore, may be more speculative in nature.

The town halls that have the tax established will have a six month term since the entry into force of the decree-law to adapt its regulations to the new legal framework.

The Minister of Finance, María Jesús Montero, already advanced this week that she would bring to the Council of Ministers “a legal text to correct elements that had been declared unconstitutional”, with the aim of giving “peace of mind and security” to taxpayers and guarantee financing. of the local entities, which are the ones that receive the resources of this tax.