Resicom – Holiday Investment – 04-21 – LB

Malaga Property Sellers Could Be Owed Tax Rebate

As many as 35,000 property sellers in Malaga could be entitled to a tax rebate after selling their Malaga properties between 2013 and 2016.

Due to the popularity of Malaga with British expats and overseas property investors, many could be affected by the overcharging plusvalia tax that was recently deemed unjust in Spain’s Constitutional Court.

The tax was charged by municipal councils in Spain on residential land, and worked on the basis that land increased in value the longer it was owned, therefore not taking iunto account peaks and troughs in property and land valuation.

Tinsa Technical Consultants studied house and land prices using data from the Ministry of Development and the Association of Property Registrars.

Director of Tinsa, Marta Garcia, commented: ‘The ruling paves the way for a favourable response in ongoing and future claims in the cases of sale, inheritance or donation of property that have been reduced in value between the time of acquisition and the time of sale.’

She continued: ‘Up to now, challenges to the tax have been dealt with with a very uncertain prospect of success, since the interpretation of whether or not the tax was collected corresponded to the judge in each case and to the expertise of the lawyers involved.’

Malaga council has created an online form following the court ruling, to help any property sellers that believe they may be due a tax rebate claim on properties they have sold in the city area.

It is believed up to 550,000 sellers could have been affected nationwide in Spain, with Malaga being the fourth biggest hit province behind Barcelona, Madrid and Alicante.

The Ministry of Finance in Spain is studying the court ruling to decide how to reformulate the laws on land tax.

The Spanish property market suffered badly following the 2008 global financial crisis, so land values certainly fell and claims are likely to be possible. Property sellers should obtain technical accredited reality-based land evaluation reports that strengthen their claim.

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