The tax basis is due to the increased value of the land stated at the time of acquiring and experienced during a maximum of 20 years. To calculate this basis two elements are taking into account: the value of land and the percentage of increase. This increase percentage is calculated by multiplying the number of the whole years since the last transmission, by the  quota established by the Town Hall. To calculate the tax two other elements are considered: on one hand the increase in the value of the land (which is objectively fixed) and the tax rate approved by the City Hall.

It is important to recall that the increase in the value of the land is objectively fixed because this matter has been objected by the contentious-administrative courts of justice, in this case the Superior Court (TSJ) of Valencia. This is, if the increase in the value of land has not been really produced, there is no the taxable issue is there. The problem in these cases is to prove that such an increase has not occurred.

The 14 September 2016 judgment of the Contentious-Administrative Chamber of the Supreme Court of Valencia annulled the liquidation of a plusvalue tax liquidated by a Valencian Municipality. The case was  based on the settlement made by the transmission of a plot and industrial building built on it. The value of the land at the time of acquisition (1987) was about 70,000 euros and the declared valeu of the new building (1999) was worth about 260,000 euros. Both were transmitted (2014) for 250,000 euros and therefore the Town Hall released a liquidation by IVTNU of nearly 50,000 euros, based on the "objective increase" and, evidently, regardless the depreciation produced and the reality reflected in the deed of sale.

The taxpayer went to the contentious-administrative justice and, in the first instance the judge dismissed the claim on the grounds that no evidence had been presented (expert or a similar opinion) attesting that between the date of acquisition and date of sale no appreciation had been produced. In short, everything was an evidentiary matter.

Appealed the judgment, the TSJ of Valencia understood that the Deeds are sufficient proof of depreciation. Specifically, such Sale Deed "indirectly show the lower value of the property at the time of transmission [with regard] to the time of acquisition." For the Court the depreciation of the property was so obvious that no further proof was needed rather than the Deeds themselves. The Court ruled “to grant the appeal and the claim against the aforementioned liquidations".

This exemplary sentence has overturned all municipal practice to take into consideration systematically only the objective increased assessed value. It could even affect the entire tax system and applied to other cases and the application of the so-called Transfer Tax (ITP). We'll see if more judgments are ruled in the same direction such as the Courts of other Autonomous Communities and even Supreme Court.

Spanish