Selling your house in Torrevieja? The legal way to claim back the Plusvalia Tax
When a property owner sells a home in Torrevieja or Orihuela Costa, they must face several tax expenses. One of the most common mandatory taxes is the Plusvalia Tax. Its technical name is the Tax on the Increase in Value of Urban Land.
Many sellers are unaware that current regulations offer very interesting legal alternatives. In fact, these options allow you to drastically reduce the cost of the tax. It is even possible to avoid its payment completely in certain cases.
The objective calculation method vs. the real method
Town halls apply by default the objective method when issuing the tax bill. This system calculates the tax based only on the cadastral value of the land. In addition, it takes into account the years of ownership, but it completely ignores whether the real estate market went up or down.
Fortunately, the Supreme Court upholds the taxpayer’s right to choose an alternative. This is the direct estimation method or Real Method. This system calculates the tax based on the actual capital gain of the transaction. For this purpose, the original purchase price is subtracted from the current sale price.
When can you avoid paying Plusvalia Tax?
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Selling at a loss: It may happen that you sell the house for a lower price than its purchase. If you prove this capital loss with the deeds, you will be exempt from paying this tax.
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Low profit: Sometimes, the actual profit from the sale is lower than the amount claimed by the town hall. In this situation, the law allows you to pay taxes only on that real gain, reducing the bill to a minimum.
Deadlines to claim back overpaid money
If you have already paid the plusvalia tax automatically, you can still get your money back. The deadlines depend on how the tax was managed:
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If the town hall sent you a direct assessment, you have 1 month to file an appeal.
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In case you filed a self-assessment, the legal deadline to request the refund extends up to 4 years.
Before paying any amount to the local council, it is essential to analyze the deeds well. An expert team like Orihuela Solicitors will calculate the most beneficial method for your pocket.
