In a ruling by the Spanish Constitutional Court, the method by which the municipal capital gains tax is calculated has been declared unconstitutional. As a result, municipalities throughout Spain see a source of income of around 2.5 billion euros per year drying up.

Since 2017, there have been a number of rulings because this tax was payable regardless of whether or not a profit was made. In a boom this can be considered normal, but if you sell at a loss, it is anything but normal that you will be taxed on this. In the meantime, as a seller (or as an heir) you no longer had to pay this tax if you had a net loss. But since yesterday it has gone one step further; no one will have to pay these until further notice, as the calculation method is considered unconstitutional. The exact circumstances are as yet unknown, because the explanatory text of the judgment has yet to be written.

It seems clear to us that the tax authorities will do something about this and provide a new calculation method. When this will be and how, remains to be seen for the time being…