As Idealista readers may recall, Spain’s Constitutional Court overturned plusvalia tax last 26th October 2021. We published a detailed article at the time. The legal effects would come into force as from the next day this landmark ruling was published in Spain’s Official Law Gazette (BOE, in Spanish), as with any other law. We advised at the time that it was highly likely a new law would be approved soon (days or weeks), so chances to wriggle through scot-free were slim at best. The thing is, that this High Court ruling that overturned plusvalia tax has not been published in Spain’s BOE after over two weeks, which seems irregular.
On the 9th November 2021, in absolute record-time, the Spanish Government published the new revamped plusvalia tax which came into force on the 10th of November 2021. This new law, despite what was initially claimed by Spanish Tax Authorities, has in fact no retroactivity to the 26th of October, which is a welcome respite.
So, if you are:
- Selling property
- Gifting property
- Inheriting property
You need to pay plusvalia tax in Spain as of the 10th of November 2021 and onwards.
However, despite the new law, there are some red flags raised regarding a series of points:
- What happens to all the transactions signed between the 26th of October 2021 and the 9th of November 2021?
- Town halls, in most cases, require several months to adapt their own bylaws to this new state law.
- Some lawyers are questioning whether this new law can in fact be repealed on grounds of being unconstitutional. This is because, under Spanish Constitutional Law , laws that create a tax need to be enacted and ratified by Congress. However, this new law was not approved in parliament, it was passed directly by the government which, from a legal perspective, is highly questionable and leaves the door ajar to be challenged in the near future.
Further reading from idealista: