Finally a judgment from the top Court in Spain that plusvalía may not be charged on property sold at a loss

There is good news and bad for vendors who are faced with large bills for plusvalía when they sell a property. As I explain HERE, plusvalía is a tax on the increase in assessed value of the land on which a property is situated during a vendor’s period of ownership. Its proper name is Impuesto sobre el Incremento del Valor de los Terrenos de Naturaleza Urbana. It is calculated both on the surface area of the plot as well as the difference in its Valor Catastral (rateable value) between the point of previous sale and your own purchase.

This can run into the thousands, and there has been much talk recently about regional Court judgments in different parts of Spain which ruled that it should not be imposed when the vendors sold at a loss. Last month, however, the highest Court in Spain, the Constitutional Court, ruled that plusvalía cannot be imposed when there is no profit, and by definition no increase in value of the land, and last week the judgment was published in the Boletín Oficial del Estado making the ruling binding through the country.

Unfortunately, the judgment doesn’t overturn the law, which will now have to be redrafted, and until that happens, plusvalía is almost certain to continue to be imposed by councils, and payment will have to be made where it is demanded. With the usual four-year tax limitation, however, anyone who sold at a loss from May 2013 can reclaim the plusvalía they should not have paid, and claim legal interest as well … and of course from now on, anyone who sells at a loss can also reclaim. Once the law is redrafted, councils will be unable to impose the tax at all on vendors who sell at a loss unless the council can actually prove an increase in value in the land.



  1. Plusvalia:
    We sold our apartment in El Marques Palace in July 2017 at a loss, and paid 4,600 euros plusvalia tax. What the authorities neglected to tell us was that we only had 30 days after the sale to try to claim it back.

    1. Author

      Under the Constitutional Court judgment of May last year that plusvalía may not be charged on any property sold at a loss there is a four year four-year tax limitation, and so applies to any property sold after May 2013. As I explain above, however, until legislation changes, plusvalía is likely still to be charged by councils on all sales, but anyone selling at a loss will be able to reclaim the cost. No-one has yet successfully reclaimed, however, at least as far as I’m aware, and as I suggest above, it will probably take a redraft of the law to stop councils impose the tax where property is sold at a loss … or to pay out reclaimed amounts that shouldn’t have been charged in the first place.

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