The Supreme Court has concluded a legal proceeding in which the Sagunto City Council faced the company Treamen Investments SLU over a claim of 1,238.37 euros related to the tax on the increase in value of urban land, commonly known as the property gain tax. The Supreme Court's ruling annuls a prior decision by Valencia's Court No. 3, which had sided with the company.
The dispute arose from the purchase of a property on Teodoro Llorente street in Port de Sagunto. Following the tax settlement, the Constitutional Court issued a ruling in November 2021 that modified the calculation method for property gain tax for local tax authorities. Shortly thereafter, Treamen Investments requested a refund of the amount paid, based on the new legal framework. The council rejected the claim more than a year later, prompting the company to file an administrative appeal.
Valencia's Court No. 3 upheld the company's claim, deeming the municipal resolutions "not in accordance with the law." However, the council's legal representation appealed to the Supreme Court, which admitted the appeal due to the jurisprudential interest in determining whether settlements made before the Constitutional Court's ruling, but challenged before their publication in the Official State Gazette (BOE), could be revised.
Ultimately, the contentious claims chamber of the Supreme Court ruled in favor of the Sagunto City Council, citing its established jurisprudence. The judgment states that "settlements that were not challenged before the Constitutional Court's ruling cannot be challenged on the grounds of the unconstitutionality declaration made therein." Consequently, the municipal actions are validated, and the Valencia court's decision is annulled for "erroneous interpretation of the norms and constitutional doctrine."
The resolution does not impose costs on either party for the cassation appeal, "as there was no bad faith or recklessness." Costs from the initial proceedings will be borne by each party individually, with common costs split equally.
