lunes, 29 de noviembre de 2021
This is how the new municipal capital gain works: two calculation options for those who sell or inherit a house
• Various cases of payment of the municipal capital gain
• The municipalities will have six months to adapt
• Risk of unconstitutionality of the Royal Decree Law, according to Gestha
The Council of Ministers has just approved the Royal Decree-Law that modifies the way of calculating the municipal capital gains tax to adapt it to the ruling of the Constitutional Court that declared this tax illegal on October 26. The regulations adapt the tax to the ups and downs of the real estate market, in such a way that it seeks to pay capital gains only in the event that a home is sold or transferred when there has been a profit. Whoever sells a house in losses will be exempt from payment as of this Wednesday (November 10), after its publication this Tuesday in the Official State Gazette (BOE). It is not retroactive.
*From the moment we learned of the Constitutional ruling, the Government said it would give a quick response and it has reached the table of the Council of Ministers today. This is very good news for the city councils of Spain and for the citizens *, comments Isabel Rodríguez, Minister of Territorial Policy and Government spokesperson.
The Royal Decree Law establishes two alternatives for calculating the tax:
• The objective formula: in this case the cadastral value of the property will be multiplied with new coefficients. Each year new coefficients will be approved that will be contemplated, for example, in the General State Budget law and will evolve according to the real estate market. It is an optional method, since the taxpayer has the possibility of paying taxes based on the real capital gain obtained at the time of transfer of the property.
• The real formula: it will be a calculation of the difference between the sale or transfer price and the purchase or acquisition price of the property. If the taxpayer shows that the real capital gain is lower than that resulting from the objective estimation method, he may apply the real one.
The taxpayer may choose between these two models, the one that is most convenient for him. Rodríguez insists that the tax will not be paid if there is no profit. We recall that this tax is levied on the cadastral value of the property,s land, not the flight. Another novelty is that the capital gains generated in less than one year, calculated between the acquisition date and the sale date, will be taxed.
This Royal Decree-law, which modifies the revised text of the Local Tax Regulatory Law, has come into force today with its publication in the BOE (Tuesday, November 9) and the municipalities will have six months to adapt it to their legal framework. In 2019, the consistories of Spain collected 2,500 million euros through this tax. And the Government has indicated that they will not need to cut their services because they will be able to continue offering them to citizens.
The Royal Decree-Law establishes that the taxable base of the tax will be the result of multiplying the cadastral value of the land at the time of accrual by the coefficients approved by the City Councils, which in no case may exceed those indicated below depending on of the number of years elapsed since the acquisition of the property:
Generation period Coefficient:
Less than 1 year
1 year 0.14
2 years 0.13
3 years 0.15
4 years 0.16
5 years 0.17
6 years 0.17
7 years 0.16
8 years 0.12
9 years 0.10
10 years 0.09
11 years 0.08
12 years 0.08
13 years 0.08
14 years 0.10
15 years 0.12
16 years 0.16
17 years 0.20
18 years 0.26
19 years 0.36
Equal to or greater than 20 years 0.45
In addition, it is recognized the possibility that the Town Councils, for the sole purposes of this tax, correct up to 15% down the cadastral values ??of the land depending on its degree of updating. This guarantees that the tribute is adapted to the real estate reality of each municipality.
Various cases of payment of the municipal capital gain
For example, the owner of a home bought in 2007 for 300,000 euros and that sells in 2021 for 290,000 euros will not have to pay the municipal capital gains tax because there is no profit, on the contrary, there is a loss.
However, when there is profit, two different methods may be applied to calculate the tax base. José María Salcedo, partner of the Ático Jurídico law firm, clarifies the possible scenarios that may arise. Consider, for example, a home purchased in 2017 for 310,000 euros, and sold in 2021 for 350,000 euros. The cadastral value at the accrual date is 100,000 euros, 60,000 euros corresponding to the land. That is, the value of the land represents 60% of the total cadastral value.
If we go to the objective calculation formula, the taxable base would be 10,200 euros, the result of multiplying the cadastral value of the land by the coefficient in the table (60,000 euros x 0.17).
However, the tax base obThe real capital gain would be the result of applying the percentage that the land represents on the total cadastral value (60%) to the profit obtained (40,000 euros). This would give a result of 24,000 euros.
For this reason, in this example, the taxpayer could pay tax on the tax base obtained with the objective method (10,200 euros), instead of that obtained based on the real capital gain (24,000 euros). And it is that, applying the tax rate of 30%, in the first case you would pay 3,060 euros (10,200 x 30%), and in the second 7,200 euros (24,000 x 30%).
But the opposite can also happen, and it may be more beneficial to pay taxes on the real capital gain, than on the objective one.
This is the case, for example, of a home purchased in 2014 for 250,000 euros and sold in 2021 for 260,000 euros. This, in the case of land whose value represents 20% of the total cadastral value.
Well, the real capital gain would be in this case 10,000 euros. And to that amount we would apply the proportion that the land supposes on the total cadastral value (20%). Therefore, the tax base calculated according to the real capital gain would be only 2,000 euros (10,000 x 20%).
However, the objective capital gain would be higher in this case. Thus, to the cadastral value of the land (20,000 euros), we would apply the coefficient of 0.12. And this would give a result of 2,400 euros.
Therefore, the taxpayer in this case could choose to pay taxes according to the tax base obtained from the real capital gain (2,000 euros). And he would pay 30% of it (600 euros), while if he had been taxed by the objective taxable base (2,400 euros), the amount to be paid would be 720 euros.
The municipalities will have six months to adapt
The municipalities have since October 26 that the sentence was passed without collecting for this tribute (whose annual collection of 2019 amounted to a total of 2,500 million), hence the haste of the Treasury to have it ready as soon as possible and also do it through a royal decree-law, which allows it to enter into force immediately, once published in the Official State Gazette (BOE), without prejudice to the fact that it can subsequently be processed in Parliament as a bill subject to changes.
Despite the urgency of the entry into force of this new legislative text (on Tuesday, November 9), the Government will give local entities six months to adapt their regulations to the new legal framework.
It should also be remembered that the high court ruling does not allow taxpayers to claim the self-assessments that are already final or that are not appealed at the date of the sentence, so this decree does not have retroactive effects.
Risk of unconstitutionality of the Royal Decree Law, according to Gestha
The Technicians of the Ministry of Finance (Gestha) have issued a statement warning of the risk of unconstitutionality that the new regulation of the taxable base of the Municipal Capital Gain has been articulated by means of a Royal Decree Law, dispensing with an ordinary law.
According to the Treasury technicians, the new regulation in a Decree Law could violate the principle of legal reserve of article 133 of the Constitution, for which they recommend that, once it is validated, it is processed as a bill to eliminate any risk . In his opinion, with the processing as a bill, the content and wording will be improved and greater stability of the new regulation would be achieved in the future, and *there will be taxpayers who will resort to the liquidations of the Capital Gain with the new regulations asking the Courts of Justice that raise a new question of unconstitutionality *.
The finance technicians also urge the municipalities to approve the fiscal ordinances before the six-month term, since they calculate that *each month of ,impasse, supposes a loss of about 170 million in the municipal coffers, according to the collection foreseen for 2021 of 2,075 million *.