Last Tuesday, November 9, the Official State Gazette published the Royal Decree-Law 26/2021, approved by the Council of Ministers and adapting the revised text of the Law Regulating Local Finance (hereinafter TRLRHL), approved by Royal Legislative Decree 2/2004, of March 5, to the recent jurisprudence of the Constitutional Court regarding the Tax on the Increase in Value of Urban Land, more commonly known as “municipal capital gain ”.
The tribute, which has regularly suffered jurisprudential pronouncements alleging the unconstitutionality of several precepts included in the regulations (in 2.017 the subjection to it was already attacked in cases in which it was considered that the existence of surplus value could not be proven, by means of STC 59 / 2017, of May 11, 2.017), had received the last thrust on October 26, with the Judgment of the Constitutional Court (which has not yet been published in the BOE) that declared articles 107.2.a) and 107.4 of the TRLRHL unconstitutional and null, thus leaving in technical KO the possibility, on the part of the municipalities, to settle this tax, having eliminated the method calculation of the tax base thereof.
The Government, taking into account the statement of reasons for the publication, has argued that, “in case of extraordinary and urgent need”To avoid damages due to the delay in the time of the adoption of the measures through the ordinary normative channel of article 86 of the Spanish Constitution, for the execution of the modifications to adapt the mandate of the High Court to the legal system.
Going into detail, but briefly, to the content that modifies Royal Decree-Law 26/2021, the nature of the tax is maintained. A tax levied on the increase in the value of land, revealed at the time of accrual and experienced over a period of 20 years.
The same, introduces as new assumption of non-subjection, in cases where it is found, at the request of the interested party, that there has not been an increase in value, providing the pertinent documentary justification (titles that document the acquisition and transmission in those terms), and granting as a novelty the power so that the municipalities can verify the declared value.
Redefines the tax base calculation method, according to the explanatory memorandum of RD-law 26/2021, more objectively, indicating that the taxable base 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 In this case, they may exceed those established in the following table:
| Generation period | Coefficient |
| Less than 1 year | 0,14 |
| 1 year | 0,13 |
| 2 years | 0,15 |
| 3 years | 0,16 |
| 4 years | 0,17 |
| 5 years | 0,17 |
| 6 years | 0,16 |
| 7 years | 0,12 |
| 8 years | 0,10 |
| 9 years | 0,09 |
| 10 years | 0,08 |
| 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 |
The coefficients may be updated annually by regulation of legal rank (for example in the LPGE). As a novelty, this method, optionally, may be replaced by taxation based on the real capital gain obtained at the time of transfer of a property, provided that it is proven to be lower.
Another controversial novelty is introduced an assumption up to now not subject to tax by the Tax, such as the capital gain generated in less than one year. That is, unlike how it has been up to now, if we transfer a property less than a year apart, and it generates a capital gain, the operation will be subject to Tax. This point can cause controversy, between the original purpose of the tax assessment, and the one that is intended to be given by the legislator, trying to penalize speculation.
The municipalities will have a period of six months from the entry into force of the Royal Decree-law, to adapt their regulations to the new legal framework. Meanwhile, the provisions of the same will be applicable.
Lastly, it will come into force the day after its publication in the BOE, that is, on November 10, 2.021..
There are still many questions to be answered, such as what will happen to those settlements and self-assessments accrued previously, but which have not yet been submitted, or whether the new assumption of subjection for capital gains generated in periods of less than one year will be grounds for a claim, and even the uncertainty generated with the simple publication without even having published the judgment of the Constitutional Court in the Bulletin itself, but since tomarial we are sure that we can offer you updated advice in real time and in detail to optimize and give legal certainty to the situation of its operations (subject or not) to the Tax on the Increase in Value of Urban Land.
Enrique Moreno Jurado
Tomarial Tax Area Collaborator
