The possibility that real estate sellers can claim compensation for the municipal capital gains tax applied until it was annulled by the Constitutional Court in 2021 is complicated, it will be more difficult to achieve it. And, in this way, the risk that the State will have to assume billions in compensation for a tax that allowed councils to collect around 2,000 million euros a year is reduced. These are the clues that give the first positions of the Supreme Court, which yesterday rejected the first four appeals raised by companies and citizens that alluded to the patrimonial responsibility of the State after the annulment of the tax as unconstitutional . In so many other rulings, the administrative court has dismissed each of the attempts to recover for the now-disappeared tax on the increase in the value of urban land (IIVTNU), which is how the tax is actually known.
The tax was applied to the profit generated by selling a property. The Constitutional Court annulled it, considering that the calculation of the tax base was based on fixed parameters that did not reflect the real evolution of the real estate market. The decision forced the Government to reconfigure it, so that the taxpayer can now choose between two options: the difference between the sale and purchase value or, secondly, coefficients based on the cadastral value.
Yesterday’s judgments of the Supreme Court focus on the claims in which the way of the patrimonial responsibility of the legislative State is raised. The same sentence of the Constitutional Court expressly limited other avenues of complaint, such as the review of tax obligations.
The Supreme Court concludes that the sentence of the Constitutional Court “does not necessarily lead (…) to classifying the payment of certain amounts as illegal or that these amounts, by equivalence, constitute effective damage from the perspective of patrimonial responsibility”.
For it to be possible to claim the State’s responsibility, he points out, it is necessary to go further. It should be proven “that the taxable event did not occur or that it occurred in an amount different from that established by the Administration with its method of objective estimation, or that the calculation rules applied were incorrect”.
None of these extremes occur in the cases examined, he says. In two, an increase in the value of the land was recognized directly by the appellants and in the other two, the direct estimation of the value was allowed through the test.
The court considers that the plaintiffs could understand from the sentence of the Constitutional Court that there is a “presumption of the illegality of the resulting damages”. However, this is not necessarily the case. There is no such thing, asserts the Supreme Court, “the automatism claimed by the plaintiff, who understands that he is entitled to compensation just for having paid the tax”.
