The method for calculating municipal capital gains tax is declared inconstitutional and the government hastily adopts new rules
Key aspects
> The Constitutional Court has published on its website the judgment declaring the unconstitutionality of the method for calculating tax on the increase in the value of urban property (“IIVTNU,” commonly known as “municipal capital gains tax”).
> Following the publication, the Spanish government has enacted a Royal Decree-law, approving a new regulation to fill the legal vacuum following the judgment.
> It is advisable to analyze on a case-by case basis how the Constitutional Court’s doctrine and the newly approved regulation affect previous and future taxation on the transfer of urban land.