Despacho Carrión & Asociados - Collado Villalba - Madrid
A Breath for Property Sellers in Spain

A Breath for Property Sellers in Spain


David Carrión Alemán Licensed Lawyer.


The Constitutional Court, the highest one in Spain, has given a breath to property owners who plan to sell or donate their houses, eliminating an unfair land tax who punished proprietors who were selling on losses (very usual in Spain since the bubble crash of 2008), donating to relatives or receiving family houses as inheritance.

The ruling of the Constitutional Court, dated May 11th 2017 declares null and void several articles of the tax on the increase in the value of the urban land (IIVTNU or “Impuesto sobre el Incremento del Valor de los Terrenos de Naturaleza Urbana.”), popularly known as “Impuesto de plusvalía municipal” municipal surplus value. Notice even the name was designed to be misunderstood. The tax until now was penalizing the mere passage of time, and not a real surplus value on the property. If the house was being sold for a minor price than the previous purchase price, the tax was exactly the same. If the property was donated or inherited, the grantee or inheritor had to pay the tax no matter there was not a surplus value on the transmission. Thus, in the last 10 years many properties in Spain have been granted to the government, as the heirs or grantees could not afford this evidently unfair IIVTNU tax.

This ruling can affect to more than a half of the people that are now selling, donating or giving, and about 550.000 families who have already sold their properties.

The whole of the members of the Court unanimously concludes that it can not be taxed with this municipal tax when there are neither losses nor gains n the sale or donation of the property. The decision of the High Court opens the door for taxpayers to submit claims to recover the tax already paid, but it has to be within the 4 years after the payment.

This is an important measure, as the tax amount is not low: in big capitals can vary between €5,000 and €16,000 on an average flat, when the owner has owned the house for more than 11 years, which is very usual. Let's remember the market in Spain does not move at the same speed than other wealthy countries in Europe.


Let's see what to do in 3 different cases, depending on whether the house is sold and whether the tax has been paid or not.

  • 1. In case the property is not already sold out. The sellers of a real estate property in Spain that are selling their property right now, on a value equal or below the price of purchase, will not have to pay the tax. If you are selling the house, better ask for professional advice and do not leave provision of funding at the notary office for that subject.
  • 2. In case the property is already sold. If the City Council has issued a settlement, the taxpayer will only have a period of one month to file recourse (appeal). Accept this piece of advice: do not pay such tax before going to a professional lawyer to advise. It is worth, thousands of Euro will be saved with that visit.
  • 3. When the tax has been already paid. The taxpayer who has submitted a self-assessment before the City Council will have four years to request its rectification and the return of the revenue improperly collected by the Administration. In this last procedure, a request for rectification of self-assessment must be submitted to the City Council stating the amount paid. Should this request be dismissed, we would again be able to file an appeal for reconsideration before the Municipal Economic Administrative Court, thus exhausting the administrative channels. As long as this procedure is not easy to write and to attach the proper paperwork, believe me it is better to do with a loyal and experienced professional.
  • 4. Finally, and in case we have not yet obtained the desired result, we have to go to court, where, given the latest judicial pronouncements, there is undoubtedly more probability of success. In this case, the period we have is two months to file an administrative contentious appeal before the corresponding High Court of Justice.

In any of this cases, please find a professional to be adviced. There is a lot to win or not to loose. Tax on Surplus value fo the properties will not be the same since the last Constitutional Court ruling. And remember, this measure might affect more than a half of the future sales and purchases in Spain.

For finding a professional lawyer close to you or the property either sold or that you are planning to sell, please visit www.despachocarrion, or call at +44 7716644154 (UK and abroad) or +34 91 19817980 (Spain).

Carr & Associates Law Firm Call us. You win.