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Exemption on Income Tax and municipal “plusvalía” on the forced transmission of the habitual dwelling of debtors.
08 July 2014 @ 18:13

In general terms and for everybody, is approved the exemption of the possible capital gain that could arise because of the transmission of the habitual dwelling of the debtor to the bank, to call off the loan obtained to pay the property. This with effect from January the 1st of 2014 and for transactions made in the last four years.

Therefore, in case you declared a revenue for this, you can apply for the revision of your income tax declaration to obtain back the tax paid back then. In exactly same terms for the “plusvalía” due to the Town Hall.

Probably the introduction of this tax measure in the Income Tax is something more of a wink to the society than effectiveness on pocket of citizens affected by a bank execution, as the value of the property now is much lower than it was when it was originally bought, but it could really have some economic effect on the “plusvalía” tax due to the Town Hall, as the rules to calculate the “profit” arisen with the bank execution of the property had nothing to do with the real economy of the transaction, and therefore the citizen affected by forced transmission of the property of its habitual dwelling could be given back the tax paid, or at least to obtain the nullity of the tax debt arisen when it happened.

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