A building under construction. / R.C.

Owners who have an ongoing complaint against their tax charge will benefit from the judgement

There will be no backdating of the decision so people who have already paid the land tax without dispute will not be refunded


The way the amount of Plusvalía tax is worked out has been the subject of controversy for a long time - the land value tax has always been calculated on the authorities' belief land is worth a different 'official' amount to its real value on the open market.

What is Plusvalía? Known officially by the initials IIVTNU, it is paid when a property changes hands (even if it is not sold) based on a law that assumes the land the property is built on has gone up in value, even if in reality it hasn't.

Why is it controversial? The official calculation is based on the authorities' cadastral value of the land a property is on - a form of rateable value. As this is often out of date or doesn't reflect market conditions, even if a property has been sold at a loss, the tax has often been due regardless.

Who will this new judgement affect? The news this week only came in a press release and the full detail has yet to be published to be properly evaluated by the authorities. It is expected that the tax will be stopped from now on and not imposed, until it can be reformed and relaunched.

What impact will it have on the town halls? The tax is one of the most important for councils. It is calculated that 2.5bn euros a year comes from it nationally.

And if you have already paid it? In theory, it seems likely that those who have already paid the tax on a past property transaction won't be able to get it back, except perhaps if they have started some sort of legal complaints procedure.