Lawyer Raymond Nesbitt goes on to explain how vendors (both resident and non-resident) can now benefit from a time-limited opportunity to claim back their tax on selling property at a loss in Spain. WARNING: in the majority of cases, you only have 30 days to file for a tax rebate.

By Raymundo Larraín Nesbitt
Director of Larraín Nesbitt Lawyers
8^th of November 2017

Introduction

Following a recent Constitutional Supreme Court ruling from 2017, if you have sold (or are planning to sell) property in Spain at a loss you can now benefit (for a limited time only) from a full tax refund (plus interests).

The new ruling argues that taxes need to respect the constitutional principle of economic capacity. Taxing someone when no profit was made (on selling) would therefore be unconstitutional and would qualify for a full tax refund.

On selling, a vendor needs to pay a tax known as ‘plusvalia’ tax. It is this tax that can be fully refunded.

Practical effects of this new ruling

• Vendors who sold property at a loss as from 2013 can now request a full refund of plusvalía tax plus legal interests on top.
• It is estimated over 550,000 vendors qualify for this refund since 2013.
• Refunds on average stand to be in excess of €3,000.
• All claims are time-gated. You cannot claim back your money after the statute of limitations kicks in. In the majority of cases, you only have 30 days to file for a tax rebate; exceptionally 4 years.

How can we help you recover your money­?

One of the core specialties of our law firm is litigation.

We will examine your matter free of charge and report back to you if you have a strong case.

What we need from you

• Copy of Title Deed (buying).
• Copy of Title Deed (selling).
• Copy of last IBI/SUMA invoice.
• Copy of plusvalia tax invoice.

Frequently Asked Questions

1. Does this new ruling mean I no longer have to pay plusvalia tax on selling at a loss?

No. You will be expected to pay this tax to your town hall on selling a property whether you have made a profit or not. Once you have paid it can we then claim back the tax on your behalf plus interests.

2. Hearsay has it that I only need to fill in a form before a town hall to get my money back. Why should I need to hire a lawyer?

This information is incorrect, hugely misleading and can make you lose ALL your money. There is nothing worse and more dangerous than a half-baked truth.

The first step for a law firm to recover your funds is to apply for a refund petition. Wording and arguing the petition properly, in a legal manner, is critical for reasons I explain further below. In 99% of cases town halls turn down this form or simply ignore the claim.

Once the claim is spurned by a town hall, the following step is to instigate a legal proceeding which hinges on said petition, hence its importance. If the petition was incorrectly worded, say by a layman, the case is lost beforehand, and you will NOT receive back your money, period. Litigation is necessary almost in every case to recover your money.

If you want your funds back, you simply need to hire a law firm such as ours to act on your behalf from start to finish; you cannot cut corners doing it yourself.

3. Can I claim my money back without a lawyer?

You can try albeit most likely fail. You simply need to appoint a lawyer to litigate on your behalf.

Conclusion

There is a limited time frame to claw back your tax refund (which varies depending on your own personal circumstances, ranging from only 30 days to 4 years). After your claim becomes time-barred, your case is precluded and you lose all your money.

Act now, you will not get a second chance! Contact us free of compromise before it is too late.

"La acción es la clave fundamental de todo éxito." – Pablo Picasso.

Loosely translated as: "Action is the key to success".

Pablo Picasso was a Spanish painter, sculptor, printmaker, ceramicist, stage designer, poet and playwright who spent most of his adult life in France. Regarded as one of the most influential artists of the 20th century, he is credited for co-founding the Cubist movement. Child prodigy, Malaga-born Picasso achieved universal renown and immense fortune for his revolutionary artistic accomplishments, becoming one of the best-known figures in 20th-century art. One of a kind towering artistic figure that casts a long shadow over every other artist that has followed in his wake.

Larraín Nesbitt Lawyers, small on fees, big on service.

Larraín Nesbitt Lawyers is a law firm specialized in litigation, conveyancing, taxation, and inheritance. We will be very pleased to discuss your matter with you. You can contact us by e-mail at info@larrainnesbitt.com, by telephone on (+34) 952 19 22 88 or by completing our contact form.

Article also published at Spanish Property Insight: Have you sold property at a loss in Spain? You can now apply for a full tax refund!

*Court runner’s fees & property assessment report not inclusive.

Legal services Larraín Nesbitt Lawyers can offer you

• Litigation

Litigation related articles

• Is Litigation Against Spanish Developers Worthwhile? – 23^rd May 2008
• 10 Reasons why your Case against a Developer may be thrown out of Court in Spain – 8^th September 2012
• Supreme Court Rulings on Bank Guarantees – 8th April 2015
• Off-Plan Bank Guarantees and Supreme Court Rulings – Payback Time – 8^th June 2016
• Spain’s Constitutional Court rules ‘Plusvalia’ tax is illegal if property is sold at a loss – 3rd March 2017
• Recap of Legal Actions in Spain against Banks & Others – 21st March 2017
• Selling property at a loss in Spain: ‘Plusvalía’ tax no longer payable – 18th May 2017
• Have you sold property at a loss in Spain? You can now apply for a tax refund – 8th November 2017

Please note the information provided in this article is of general interest only and is not to be construed or intended as substitute for professional legal advice. This article may be posted freely in websites or other social media so long as the author is duly credited. Plagiarizing, whether in whole or in part, this article without crediting the author may result in criminal prosecution. VOV.

2.017 © Raymundo Larraín Nesbitt. All rights reserved.