The fourth final provision of the Law 16/2012, of December 27, by which various tax measures are adopted aimed at consolidating public finances and promoting economic activity, has introduced a section 5 to article 254 of Mortgage Law, Consolidated Text according to Decree of February 8, 1946, with the following wording:
"5. The Property Registry will not practice the corresponding registration of any document that contains an act or contract determining the tax obligations for the Tax on the Increase in Value of Urban Land, without previously accrediting having presented the self-assessment or, in where appropriate, the declaration, of the tax, or the communication referred to in letter b) of section 6 of article 110 of the Consolidated Text of the Law Regulating Local Treasuries, approved by Royal Legislative Decree, 2/2004, of March 5th."
The tax on the Increase in Value of Urban Land, commonly known as municipal capital gains, taxes the increases in value experienced by urban land and that is revealed as a result of the transfer of property, by any title. , or of the constitution or transmission of any rights of enjoyment limiting the domain over the aforementioned lands.
It is a municipal tax whose requirement depends on each municipality. The reality is that most of them require it, within the minimum and maximum limits established by the Local Finance Law. The taxpayer in the case of lucrative transfers (donations) is the purchaser of the asset or the person in whose favor the right is constituted or transferred and in the case of onerous transfers (purchase and sale) is the transferor of the asset or the person who constitutes or transmits the right.
The taxpayer of the tax has the obligation to settle the tax within 30 days in the case of transfers inter vivos and 6 months in the case of transfers mortis causa, through the declaration or self-assessment system, according to the ordinance prosecutor of each municipality. At the same time, there is the obligation to communicate the completion of the taxable event, in the case of lucrative transfers (donations) by the transferor of the asset or the person who constitutes or transfers the right and in the case of onerous transfers (purchase and sale) by the purchaser of the asset or the person in whose favor the right is constituted or transferred. And notaries also have the obligation to communicate the completion of the taxable event to each city council, through the telematic means available to us.
With all these regulations that allow the administration to have sufficient knowledge of the facts subject to the tax, it is surprising that the registration closure has also been added, which can be extremely harmful in the case of sales, since the buyer of a property will not be able to register their deed in the property registry until compliance with obligations that are not theirs is accredited.
How it will be possible to articulate an agile and safe system that does not cause damages or expenses to property purchasers, remains to be seen, although we are aware that a global solution is being worked on.
