If you sold a property below the price you originally acquired it, we have good news for you. The Constitutional Court has invalidated the urban land appreciation tax in those cases where “the economic capacity levied by the tax could be, not only potential, but also nonexistent, virtual or fictitious.” The reason behind this is that it is contrary to the income principle provided for in the Spanish Constitution.


The tax is contrary to the income principle provided for in art. 31 of the Spanish Constitution, where no increase in the price has occurred, or even when the conveyance price is below the acquisition price. In the event of no capital gains, or indeed capital losses, it would be mistaken assuming that “there would be a urban land appreciation simply by reason of owning urban property for a certain period of time”. In this sense, the Constitutional Court reminds that “citizens will contribute to the sustainability of public expenses, according to their economic capacity, by means of a fair tax system, based on the principles of equality and progressiveness, which in no case will be confiscatory.”   Based on this this assumption, many owner who conveyed a property below the acquisition price and payed the urban land appreciation tax, may recover the paid amounts.


Our team of specialists in Tax Law, obtained the first judgement for one of his clients in Málaga, even before the Constitutional pronounced sentence. Fuengirola´s City Council, as a result of our action, had to refund   one of their inhabitants, in concept of urban land appreciation tax, the approximate amount of € 5.000 plus legal interests. In this specific case, the owner acquired a property for € 220,000 and sold it at a loss for € 70,000, which shows the illegal nature of the tax. Thus, it is stated by the Judge that, if no appreciation of the property has occurred, no capital gain should be levied. Currently, with the support of the Constitutional Court, the success rate in proceedings multiplies.


Considering the number of inquiries we are receiving related to this matter, we have put at the disposal of all the affected a specific form on our web. Do not hesitate in contacting us, by pressing here, and send us your contact details. A member of our team, specialized in Tax Law, will require you with  the necessary documentation to study the feasibility of your case. Shortly, he will inform you on the steps to follow  in order to solve your problem.