Tax Reform regarding the Increase in Value of the Urban Land Tax

This week the Royal Decree-Law 26/2021, of November 8 (hereinafter "RDL 26/2021"), was published in the Official State Gazette (BOE), by which its applied the consolidated text of the “Ley Reguladora de las Haciendas Locales”, approved by Royal Legislative Decree 2/2004, of March 5 (hereinafter "LHL"), to the recent jurisprudence of the Constitutional Court regarding the Increase in Value of the Urban Land Tax (hereinafter "IIVTNU"). 

With this Royal Decree-Law, the Government intends to adapt and modify the IIVTNU regulations, which after the Ruling 182/2021 issued by the Constitutional Court, not yet published in the BOE, has expelled the articles regulating the taxable base of the IIVTNU by understanding that "the maintenance of the current objective and mandatory system of determination of the taxable base, for being alien to the reality of the real estate market and the economic crisis, and, therefore, outside the economic capacity taxed by the tax and demonstrated by the taxpayer, violates the principle of economic capacity as a criterion of taxation (Article 31. 1 EC)". 

Without prejudice to the effects of this Ruling for previous accruals, RDL 26/2021 regulates the situation applicable to accruals occurring as of its entry into force, 10-11-2021.