Councils continue to levy plusvalia despite clear rulings from the Spanish Supreme Court (Tribunal Supremo)

A Council is not allowed to levy plusvalia when co-ownership of a property is ended

26 / Mar

It happens very often. Spouses that divorce and allocate the property to one of them, heirs that want to get out of an inheritance leaving just one of them as sole owner. In these situations, the Council is not allowed to levy plusvalia, but many still do.

The Supreme Court has ruled several times on the cases of separation of joined property, most recently the Superior Court of Justice of Catalonia, considering that the division and adjudication of the common property are internal acts of the community of owners and not a transfer of the domain itself. For there to be taxable transmission it must be transmitted to a non-community third party.

The art. 104 of the TRLRHL, section 3 says that:

3. There will be no taxation in the case of contributions of goods and rights made by the spouses to the marital partnership, conversion that are verified in their favor and in payment of them and transfers made to the spouses in payment of their common assets.

Nor will there be a subjection to the tax in the cases of transfers of real estate between spouses or in favor of the children, as a result of the enforcement of sentences in cases of nullity, separation or divorce, regardless of the matrimonial economic regime.

So, there will be no plusvalia if co-ownership is terminated.

The Supreme Court ruling of May 23, 1998 indicates that it has recognized, by the general doctrine that “the division and adjudication of the common thing are internal acts of the community of owners in which there is no transfer of ownership, so that, as a consequence, for the first transmission, only the one with a third party recipient can be understood ”(that is, the one that occurs after the extinction or during the same to a non-commoner).

More recently, the Judgment of the Superior Court of Justice of Catalonia of April 18, 2013 has indicated that the dissolution of the community does not have a translational nature but merely a specifying one, not constituting an act that would be subject to the municipal capital gains tax on the Increase of Land Value Urban Nature since there is no taxable event of the aforementioned tax in the extinction of the joint property.

Maria Dolores Garcia Santos