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Tuesday, 14th - 20th March 2017
NEW TAX RULING SET TO BANKRUPT TOWN COUNCILS Plusvalía is an additional tax that is levied on the seller when a property is sold. It relates to the value of the land on which the property is built and its calculation is based on the cadastral (rateable) value and an estimated increase in the land’s worth since it was first purchased. raditionally, plusvalía is collected by town councils and is a large chunk of the town hall budget. In a town such as Torrevieja, it can represent a significant income and it is now one that is under threat. Recent court rulings have stated that
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the calculations on which the plusvalía is being worked out are erroneous. As we know, property value has fallen generally and with it the price of land. This has not been taken into account when it comes to the calculation of plusvalía and courts are increasingly saying that it should have been. This could make life for town councils extremely difficult. Rightly or wrongly they have collected money over the last few years that they could now be obliged to pay back and, with a double whammy, may not be eligible to collect any more. The issue has been picked up by the PP
in Torrevieja who have presented a motion demanding that Torrevieja town council stops charging plusvalía and puts in place the means by which people who have paid it in the past can have it returned to them.
Not only this, but opposition councillors are calling for a publicity campaign to ensure that the maximum amount of money is returned. This would include money that was collected when the PP were in government too. However, this could be devastating for councils who are already struggling to preserve services in the face of falling budgets. Although the repayment of the tax and prevention of further charges could benefit individuals it could also result in major problems in ensuring the basics of local policing, lighting and road maintenance are continued for the rest of
the community. If the current situation continues and this chunk of local funding dries up, town councils will be faced with one of two options – either to significantly increase the IBI council tax or drastically cut services. Suzanne O’Connell
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