The Spanish Constitutional Court has definitely struck down the municipal capital gains tax in cases where no increase in value has occurred. As a result of the financial crisis, many people sold their homes for less than the price they had paid for them, meaning that the taxable event had not taken place. Nevertheless, thousands of people were required to pay this tax.
This was an expected judicial setback, coming just weeks after the High Court had struck down similar levies imposed by the provincial tax authorities of Álava and Gipuzkoa on property sales in which homeowners had incurred a loss in value.