The local council has presented a motion to the national government in Spain
asking for clarification of the situation regarding collection of Plusvalía tax.
This is the tax collected by the town hall from the seller when a property is
sold. How much Plusvalía is payable depends upon the property’s rateable
value and the estimated increase on the land’s worth since it was first
purchased.
There have been problems with the tax in that it has been charged even
where people have not made a profit on selling their property. However, they
have still had to pay the tax on an alleged increase in the value of the land
even though this has not translated into a capital gain for the person selling.
Recently cases have gone to court and some sellers have received their
money back. Now, tax collection agencies such as SUMA are refusing to
collect the tax due to the uncertainty of the situation.
This loss of tax revenue is having a major effect on town councils, particularly
ones like Torrevieja where the transfer of property has always been a major
source of income. In 2016 the town council collected €18,970,765 and this
reduced to €8,785,960 in 2017. A loss of €10,183,611. In 2016 the collection
of Plusvalía represented 19.5% of the total revenue of the city to 9.68% in
2017.
The situation has become even more acute because not only are collections
reduced but money has been paid back. In the last four months of 2017,
€282,964 was collected but €980,509.82 had to be returned which represents
a loss of €438,430 to the local budget. The continued loss of this income will
have a significant impact on the town’s ability to finance its projects.
The motion that the town council has submitted, supported by SUMA,
requests that the Spanish government amends the current law to better reflect
the actual increase in the price of the land, where such an increase exists.