Regional Property Taxes Will Rise in 74 Municipalities in Málaga From 2019

11 September 2018 – Diario Sur

The autonomic coefficients that are applied to cadastral values to adjust them to market prices for the purpose of calculating Property Transfer and Property Succession taxes are going to be updated from 2019.

If you are planning to buy a property next year or if you acquire one as a result of inheritance or a donation, then it is quite likely that you will be hit by an increase in the two autonomic taxes linked to the real estate market (the Property Transfer tax and the Property Succession tax) given that the index that the Junta de Andalucía uses to set the charge is going to increase in 74 of the 103 municipalities in the province of Málaga. With the recovery of the real estate market as the main justification, the multiplying coefficients that are applied to cadastral values to adjust them to market prices (to reflect the performance of the sector) will increase by an average of 12.05% in the Andalucían province with respect to the values in 2017, according to plans compiled by the Ministry of Finance (…).

Málaga province leads the rise

According to the corresponding economic report, Málaga and Almería are the only two provinces where increases are expected to be seen in global terms (of 12.05% and 10.83%, respectively). Many of the other provinces in the autonomous region will be moving in the opposite direction, with decreases expected in Huelva (-13.19%), Granada (-12.41%), Córdoba (-8.32%) and Sevilla (-7.26%) (…).

Original story: Diario Sur (by Francisco Jiménez)

Translation: Carmel Drake

Town Hall of Madrid Criticised for Selling Plot Reportedly Worth €48M for €16M

18 April 2018 – La Vanguardia

The PSOE has denounced the Government of Manuela Carmena for breaching the agreed budget for 2017 and “the most basic municipal obligation” with its sale of a plot in Carabanchel for €16 million. It alleges that the sale was a “total waste”, given that the site was reportedly worth €48 million, up to three times more.

The socialist councillor, Mercedes González, condemned the delegate for Sustainable Urban Development (DUS), José Manuel Calvo, for the sale of the plot measuring 38,140 m2, which had belonged to the EMT, for a “modicum sum” in an auction in which the property developer Pryconsa participated on its own.

The plot is located on Avenida de Carabanchel, 21, in the district of Carabanchel, in a privileged location in the opinion of the PSOE – the investiture partner of Ahora Madrid – where a significant number of social housing properties could have been built.

The socialist spokesperson on the committee denounced that the plot had been sold with the knowledge and consent of the delegate, whose team also supported the “enormous” growth of the buildability from 2,600 m2 to 27,000 m2 (…).

The plot was sold for €427/m2, or €16 million in total, even though, according to the IBI (Property Tax) charge, the cadastral value of the site is €48 million (…).

In the face of these complaints, the councillor José Manuel Calvo defended that he had not intervened in the process or the sale decision (…).

The deal between PSOE and Ahora Madrid for the 2017 budgets established that the Town Hall would not sell any of its land or properties.

Original story: La Vanguardia

Translation: Carmel Drake

2015 Tax Year: Treasury Raises Tax Rate On Second Homes

18 April 2016 – Cinco Días

The owners of second homes must pay tax on them in their annual income tax returns and many will incur a tax increase this year. The tax percentage on second home properties was fixed at 1.1% until now for homes whose cadastral values have been reviewed since 1994 and at 2% for homes reviewed before that date. The reference date now has been set as 2005, which means that more taxpayers will have to pay 2%.

The campaign for the filing of tax returns for 2015, which began last week, incorporates the new features of the tax reform approved by the Government, which mainly resulted in reductions in tax rates and tax brackets. Nevertheless, as a study published on Thursday by the Registry of Tax Advisors (REAF), an independent body formed by the General Council of Economists, shows there are also some changes that will harm the taxpayer. One of those affects the owners of second homes.

The legislation establishes that taxpayers who own second homes must pay a real estate tax on the basis of the general tax base. Until now, if taxpayers owned homes whose most recent cadastral review took place after 1994, they reported a tax charge in their tax returns equivalent to 1.1% of the cadastral value of their properties. For reviews before that date, the tax rate was 2%. For example, the owner of a second home with a cadastral value of €300,000, which was last updated in 1998, used to have to pay €3,300 (i.e. 1.1% of €300,000). From this year onwards, only homes whose cadastral reviews have been reviewed since 2005 may apply the 1.1% rate; all others have to apply 2%. This means that the owners of homes with valuation updates between 1994 and 2005 will incur a tax increase. In the case of the example described above, the owner of the €300,000 home will have to pay €6,000 from this year, compared with €3,300 that he previously recorded in his tax return.

Town halls are responsible for approving cadastral reviews. In theory, the more time that has elapsed since the last update, the larger the difference between a property’s cadastral value and its market price. For this reason, the Treasury has established a higher tax rate for homes with older cadastral values. In fact, the tax reform establishes that the 1.1% rate will apply to homes whose cadastral values have been reviewed within the last ten years. In other words, for the tax year 2016, the date for determining the application of the different rates (1.1% vs 2%) will be 2006. (…).

Original story: Cinco Días (by Jaume Vías)

Translation: Carmel Drake

Colau Approves 6% Rise In IBI For Homes Worth >€300k

18 November 2015 – El Economista

The fiscal policy of the mayoress Ada Colau has been up in the air since her victory at the municipal elections in May. But yesterday, Bcomú’s representatives approved new tax regulations, with votes form the PSC and the CUP, and despite opposition from CiU, the PP and Ciutadens, which initially resulted in a tied vote. Nevertheless, the mayoress’s casting vote allowed the regulations to go ahead.

The main impact of these new tax measures is a 4% increase in the rate of Property Tax (‘Impuesto de Bienes Inmuebles’ or IBI) for homes with a cadastral value of more than €100,000 and a 6% increase for homes worth more than €300,000. The Town Hall explained that 79% of the buildings in Barcelona are worth less than €100,000 (and will be unaffected by the measure).

Although the first fiscal policy adopted by Bcomú was to revoke the 10% increase in IBI that the previous municipal government, led by Xavier Trias, had proposed; shortly afterwards, Colau’s team proposed a property tax freeze. But following criticism from all of the opposition groups, Bcomú decided to negotiate with the other parties, ahead of the new cadastral review, which will apply from 2017. The Town Hall expects to raise €633 million through IBI.

Original story: El Economista (by Iván Gutiérrez)

Translation: Carmel Drake

Madrid’s Property Tax (IBI) Will Decrease By 7% In 2016

22 September 2015 – El País

In October, the Town Hall of Madrid will approve a 7% decrease in the property tax (‘Impuesto sobre bienes inmuebles’ or IBI) for all homes and the majority of commercial premises, offices and retail stores. This decrease, accepted begrudgingly by the minority Ahora Madrid government following its enforcement by the other parties (PP, PSOE and Ciudadanos), will be passed with equal reluctance next month by the socialists, who were seeking a higher cut. The 7% decrease in IBI will be equivalent to a €25 reduction in the average monthly bill (€350).

Yesterday, a Councillor from the Treasury, Carlos Sánchez Mato (pictured), announced a 7% decrease in the rate of IBI for all homes in the capital (1,448,765 households) and for the majority of non-residential buidlings.

Nevertheless, the rate will increase by 10% for those non-residential buildings that have a “higher cadastral (land registry) value”. The Town Hall defines this threshold as follows: for individual buildings, the increase will apply only to those that have a cadastral value of more than €35 million (there are around 30 such properties in Madrid); retail stores worth more than €860,000 (around 3,000 of more than 97,000); buildings used for sporting activities worth more than €20 million (around 30 in total); and offices worth more than €2 million (1,760 out of almost 32,000).

These targeted increases to non-residential buildings with higher cadastral values will almost entirely offset the decrease in the rate of IBI for the rest of the city.

IBI is the main source of income from the Town Hall, and therefore any change in the rate significantly affects its capacity to provide public services: IBI will account for €1,279 million of the €4,388 million that the municipal coffers will receive this year (i.e. it accounts for almost one in every three euros). The changes proposed by Ahora Madrid will reduce this revenue by just 3.7%.

A new tax

This fall in revenues (€49 million) will be primarily offset by the creation of a new tax to be paid by the companies that generate the most waste. The other municipal taxes will remain unchanged in 2016, although there may be an as -yet-unknown decrease in the price of certain services (sports centres, kindergartens, etc). (…).

Original story: El País (by Bruno García Gallo)

Translation: Carmel Drake