The Treasury had reports on the capital gains tax that asked to anticipate the veto of the TC

• Treasury The cancellation of the capital gains tax threatens the Budgets of thousands of municipalities

• Justice The Constitutional Court annuls the municipal capital gains tax

• Justice The Supreme Court cuts even more what municipalities can charge for capital gains tax so that it is not "confiscatory"

The

cancellation

the local capital gains tax has set off the alerts in the main municipalities.

After the Constitutional Court overthrew the calculation of the tax, mayors of the PSOE, the PP, the coalitions close to United We Can and the nationalist and independence parties have agreed to demand a quick solution from the Government, because if not the budgets of thousands of consistories will be in danger.

The alert was generalized and the response was immediate: the Ministry of Finance announced that it is finalizing "a legal draft that will guarantee the constitutionality of the tax, offer legal security to taxpayers and certainty to municipalities."

The Constitutional Court, in a ruling by magistrate

, considered on Tuesday that the calculation of the Tax on the Increase in the Value of Urban Land - popularly known as the local capital gain - is unconstitutional when it understands that the objective calculation system is not corresponds to reality.

Why?

Because until now the tax was always charged, regardless of whether the property has appreciated or not.

The department headed by María Jesús Montero will change the rule now, after the ruling of the court of guarantees, but according to EL MUNDO has learned, the Ministry of Finance could have reformed the tax before and have avoided the blow to the municipalities, but not did.

The PSOE asked for a reform

The general secretary of regional and local financing,

, had reports assuring that the law that regulates local finances had to be reformed, after justice had already ruled against the local capital gains tax. And before the final ruling of the Constitutional, which is due for granted in the Executive, according to the governmental sources consulted. "Our reports said that this had to be done," they acknowledged in the Treasury. But the minister did not push for the changes in time.

The Government was prepared to change the calculation of the capital gain long before the ruling.

In fact, the Spanish Federation of Municipalities and Provinces (FEMP) itself has claimed since January 2018 that the tax be modified.

And the PSOE, at that time, was already calling for "a global reform of the Tax on the Increase in the Value of Urban Land".

With the Constitutional ruling, it will be impossible for municipalities to collect municipal capital gains from now on, unless the legislator modifies the regulations to adapt them to constitutional requirements.

The sentence, in fact, suggests this.

Sources of the Constitutional Court highlight that they already warned of this extreme in the judgment of May 2017, where the court declared two other articles of the royal decree unconstitutional, and in that of 2019, when the capital gain was declared unconstitutional if the quota was higher than equity increase.

Despite this circumstance, in neither of the two cases did the Government on duty (first it was an Executive of the PP, who proposed the reform but could not approve it in time - due to the motion of censure - and then the PSOE) picked up the glove and modified the legislation.

A compensation fund

The unease is transversal among mayors. Not so much because of the sentence, which was expected, as because of what they consider a passivity of the Executive, which could have changed the law before and has not announced it until now. The councilors of the main parties demand that the legislation be modified to restore capital gains, but by urgent means, that is, by decree law. And they demand that the Ministry of Finance establish a fund to compensate them while they do not collect the tax.

"The first thing we have to do is study the sentence. Then, ask for compensation and a rule that replaces the invalid law," say sources from the FEMP, chaired by the socialist

. It is something that the Popular Party shares. "But we also demand the urgent convocation of the National Commission of Local Administration [the largest conclave between the Government and municipalities], with the presence of the Ministers of Finance and Territorial Policy [Isabel Rodríguez]," the deputy secretary of the

.

The example of Madrid is clear: capital gains are the second tax with the highest collection capacity of all those managed by the city council of the capital.

"By 2021 it is planned to raise almost 500 million."

2,354 million

It is what the municipalities received from the tax on the Increase in Value of Urban Land, better known as capital gain, in 2018, according to data from the General State Intervention (IGAE).

A drop of 8.4%

In 2018, which is the last year for which there is updated data, there was a drop of more than 8% in collection after the Constitutional ruling that already declared invalid some articles of the Local Finance Law that affected this tax.

According to the criteria of The Trust Project

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