We all have to pay Plusvalia Tax (Tax on the Increment of Urban Land Value) to our local Council when we sell a property.

The Plusvalia Tax is calculated based on the cadastral value of the land, which has never stopped incrementing even though the value of urban land has diminished in the last few years.

However, several Superior Courts of Spain, such as sentences 553/2012 of 22nd May 2012 and 310/2012 of March 22nd of the Administrative Chamber of Cataluna Superior Court: sentence 144/2015 of 13th July 2015 of the No 3 Administrative Court of Zaragoza: sentence of 26th January 2016 of the Administrative Chamber of Madrid Superior Court and, ,ore recently, sentence 520/2016 of 14th September 2016 of the Administrative Chamber of Valencia Superior Court, have ruled that the system used by the Town Halls to calculate the tax accrued is not correct, as it is based on the land incrementing its value each year and does not consider any other instances. 

This means that many times this “increment” in value is fictitious and it does not correspond with reality.  During the last few years the value of the land not only has not increased, but in many instances it has actually decreased.

Unfortunately, this Tax is compulsory, so we need to pay it first and then, if we can prove that the land did not increase in value, we can claim it back from the Town Hall, or we can claim part of the excess.

If you have sold your property in the last 4 years or so and think that your Plusvalia Tax was too high, please do contact us.  The Legal Team at ABC SOLICITORS will review the Plusvalia Tax that you paid at the time and help you claim it back.

We look forward to hearing from you!