MUNICIPAL CAPITAL GAINS IN THE CASE OF SELLING AT A LOSS

THE CONSITUTIONAL COURT NULLIFIES MUNICIPAL CAPITAL GAINS IN GUIPUZCOA WHEN SELLING PROPERTIES WITHOUT PROFITS The Constitutional Court has considered unconstitutional some articles of the regional law of capital gains in San Sebastian as a response of a question suggested by the Court in this city, considering that paying a capital gain when selling a property without profits breaks the economic ability principle. The Sentence establishes that “in any case could the legislator establish a tax taking into account acts or facts that do not show any real or potential wealth” that is, when a seller sells its house with losses. So, the Sentence considers that “the legislator must carry out changes or adaptations in order to avoid make sellers to pay taxes when there is any increase of capital gains”.