The municipal capital gain will have a new calculation method after the setback of the judgment of the constitutional Court. The Government modifies by decree the Local Finance Law to adapt the tribute to the constitutional framework. As of this Tuesday, when the rule will come into force, two methods may be used to calculate the tax base: apply some coefficients on the cadastral value based on the number of years that have elapsed since the transfer or use the difference between the purchase value and the selling.
The intention is to collect the real situation of the real estate market. In this sense, the decree will allow to choose the taxpayer the most beneficial option for calculating the tax (in the case of the coefficients, these will be reviewed annually) and, in no case, will be taxed in situations in which there is no increase in value, that is, if there has been no profit from the sale of the property, it will be exempt from payment.
The aforementioned coefficients will be those approved by the municipalities, which in no case may exceed certain parameters depending on the years of tenure: for example, in the lower part, in those transmissions less than one year, the coefficient will have a maximum of 0.14 , and in those transactions in which 20 years or more have elapsed, 0.45. The lowest coefficient occurs between 10 and 13 years of tenure, with 0.08.
Thus, taxpayers will have the option of paying taxes on the real capital gain of the land (difference between the sale and acquisition price) if this is lower than the tax base that the objective system (the coefficient system) yields. And, in any case, the municipalities may carry out the corresponding checks if that method of real capital gains is chosen.
One of the big problems that this modification will leave is in its effects. The decree will enter into force this Tuesday and it will not have retroactive effects, which opens a situation of regulatory vacuum between October 26, the day the Constitutional ruling is dated, and November 9, when the new system comes into force. It should be remembered that the ruling “supposes his expulsion from the legal system, leaving a regulatory vacuum on the determination of the tax base that prevents the liquidation, verification, collection and review of this local tax and, therefore, its enforceability”, as stated in the own sentence.
Beyond that, it will also be fixed un coefficient to be applied to those cases in which transmission occurs in less than one year. Until now, no payment was made for transmissions made within one year of the acquisition. Now, the Treasury will also tax those situations to avoid speculation.
Regarding possible claims prior to the sentence, the Constitutional Court has already closed the door to them in most cases, thus saving the municipalities from a millionaire blow to their accounts; the Spanish municipalities collect annually around 2,500 million euros. The judgment indicated that those situations that are already final cannot be reviewed, nor those that have not been appealed on the date the judgment was issued (October 26, 2021); the only cases that can go ahead will be those that were under review before that date.