Following the Constitutional Court’s ruling declaring the unconstitutionality of the municipal capital gains tax, certain transfers of real estate remain in regulatory limbo. The DGT has published a consultation that sheds light on the tax situation of these transfers.
On 26 October 2021, the Constitutional Court issued ruling 182/2021 in which it declared the unconstitutionality and nullity of the Tax on the Increase in Value of Urban Land (IIVTNU or municipal capital gains tax, hereinafter), and more specifically of articles 107.1, second paragraph, 107.2.a) and 107.4 of the LHL, relating to the method for determining the tax base of the tax.
This ruling was finally published in the BOE on Thursday 25 November 2021. Likewise, on 9 November 2021, Royal Decree-Law 26/2021, of 8 November, was published in the BOE, adapting the revised text of the Ley Reguladora de las Haciendas Locales, approved by Royal Legislative Decree 2/2004 of 5 March, to the recent jurisprudence of the Constitutional Court with regard to the Tax on the Increase in Value of Urban Land.
As established in the third final provision, this Royal Decree-Law came into force on the day following its publication in the Official State Gazette (BOE) and, consequently, the new regulations governing the municipal capital gains tax would be applicable to taxation from 10 November 2021, with no option for retroactive application.
Article 10.2 of the General Tax Law (LGT) states that “Unless otherwise stipulated, tax regulations shall not have retroactive effect and shall apply to taxes without a tax period accrued from their entry into force and to other taxes whose tax period starts from that time” Given that the effects of the Constitutional Court’s Ruling have been the expulsion of certain precepts from the legal system, which in all situations make it impossible for taxpayers to comply with their obligation to self-assess and for local councils to make settlements from 26 October; and that the new and current regulations governing the tax take effect from 10 November 2021, there is a legal vacuum between these two dates which prevents the taxable base of the municipal capital gains tax from being determined for all those transfers made in that period of time.
Until now, we maintained that all transfers of real estate carried out between 26 October 2021 and 9 November 2021 (both inclusive) had to be reported to the corresponding Town Hall, since the taxable event had taken place and the tax had accrued; however, taxpayers were not obliged to pay the tax.
However, the recent tax consultation of 7 December 2021 (V3074-21) ratifies this criterion.
Therefore, those taxpayers who have been able to carry out this type of transaction in this period of time, and have received the corresponding settlement with the amount to be paid by the Town Council, are able to appeal against this settlement, and thus avoid having to pay it.
The AddVANTE Tax Department remains at your disposal for further information or to resolve any queries that may arise in relation to this article.