Tag: IBI

Opposition Parties Force Carmena To Reduce Business IBI

1 October 2015 – Expansión

The opposition parties in the Town Hall of Madrid (namely, the Partido Popular, PSOE and Ciudadanos) have put paid to the plans of the mayoress, Manuela Carmena, to increase the IBI rate for businesses and companies to 10%. In fact, they forced an agreement for it to be decreased by 2%. (Earlier in the week), all of the political parties, including Ahora Madrid, approved a 7% reduction in the residential IBI rate, and now, the opposition parties have forced a 2% decrease in the business rate.

The agreement by the plenary session represents an overall decrease of 100% for residential properties, as well as for the vast majority of non-residential properties. The 7% reduction in the property tax, will decrease the tax from its current rate of 0.548% to 0.51%.

Moreover, the majority – the result of the vote went against Ahora Madrid – approved a commitment to continue to reduce the rate of IBI for residential properties to 0.4%, the minimum rate set by law, “respecting the payment of expenses approved by the government, as well as sustainability”.

Meanwhile, the PP congratulated itself after some of the proposals it had presented to the plenary session were approved, including: zero taxes for entrepreneurs for the first two years (…).

In the same way, it indicated that large companies should not have to pay taxes for having “larger” buildings since “the rate of IBI is progressive and so it does not make sense for smaller clinics to pay a lower rate of IBI than public hospitals”.

Begoña Villacís, from Ciudadanos, said that the Town Hall should have a “single discourse” regarding the payment of debt, and the tourist tax. Moreover, she said that her party proposes a reduction in taxes and that the Town Hall should support the cadastral review plan.

The socialist Ransés Pérez Boga pointed out that on 22 July the plenary session approved a decrease in the rate of IBI, after it had been proposed by his party. He advocated a decrease in the rate of business IBI “to maintain the social progressive nature of the tax charge”. In his judgement, the reduction will allow companies to retain their employees.

Original story: Expansión (by Mercedes Serraller).

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

Carmena Announces A “Significant” Decrease Of IBI …

3 September 2015 – El Economista

The mayor of Madrid, Manuela Carmena, has announced that there will be a “significant” drop in Property Tax (Impuesto sobre Bienes Inmuebles, IBI) in 2016 for the “vast majority”, although she could not yet specify the exact reduction because it is still being “studied”.

This was stated in an interview on Onda Cero, where she noted that it is an issue they could examine now that they are preparing budget for next year; and that they took into account  contributions of the opposition because they want to “work with everyone” .

“During elections when we were asked about taxes we said that ‘we will look into it’. Well, we have and in 2016 we will lower the IBI”, stated the Mayor of the capital, who could not, however, specify the amount of tax decrease.

“We are studying it,” she said, while acknowledging that “it will be noticeable” and that they have to keep in mind the need to “offset the income deficit”, which the tax decrease will mean. Therefore, the reduction will not apply to “certain properties with a very high level of surface”.

Municipality Debts

When asked about the debt of the City of Madrid and if the banks can remain calm, she stated that there is “no problem”, they are already paying them because they can and “there is enough revenue to keep doing it.” She also said “absolutely no” to the implication that the conducting of an audit will mean that the portion of the debt will not be paid.

To Carmena, what matters in the “first inquiries” is “to analyze the impact possibly made” by the performance of previous governments and the resulting debt in “social policies”. “It is important to know what has been accomplished, the past and the present both matter to us,” she stated.

It does not mean, she added, that since there is going to be the anti-fraud office, “as an instrument to prevent corruption, and fully dependent as a whole”, in view of the debt analysis, she referred to the same “operations that may have become irregular and may have certain responsibility.”

Original story: El Economista

Translation: Lee La

Foreign Investment Fund Offers €16.1m For Guadalpín Hotels

19 February 2015 – Diario Sur

The transaction could amount to almost €60 million in total, since Caixabank would cancel most of the sizeable debt that Aifos has with the entity.

The turbulent history of Guadalpín hotels is beginning a new chapter. Whilst the property developer Aifos, which constructed these luxury facilities, is immersed in a process to approve its liquidation plan to proceed to bankruptcy, a foreign investment fund is looking to take advantage of the opportunity by placing €16.1 million on the table to purchase the majority of the two properties, but without taking on their management. The administrators have already agreed the deal with the fund, in principle, but the transaction must be authorised by Commercial Court number 1 in Malaga, which is conducting the bankruptcy proceedings.

The offer has been presented by Lumitran System, a company controlled by foreign investors, mainly Swiss and Central European, which has set its sights on the hotels. The offer for the property in Marbella, which is located on the Golden Mile (Milla de Oro) has been made for the common areas of the building, which belong to Aifos, as well as other spaces, such as the ground floor, which houses the swimming pool, reception and garage; the apartments (in the property) are owned by another party.

In terms of the facilities in Guadalpín Banús, the investors are looking to purchase the apartments and other spaces, such as the reception, kitchen and the shops in the building. Despite this, the proposal does not provide for the operation of the hotels, which depend on other companies.

In exchange for the specified consideration, Lumitran System, would also take ownership of other items. One of the most symbolic would be the Guadalpín brand. And another, with more financial opportunities, is a plot of land known as the Village, which is situated just behind the hotel in Puerto Banús, which was reserved at the time for a potential future expansion. These are the targets of a transaction that, although require a pay-out of €16.1 million (by the investors), would generate significantly more profit for a company that does not find itself in the same situation as Aifos, which would see its debt of €59.1 million eliminated in a stroke.

The offer explains that the developer holds debt with the entity Caixabank amounting to €51.6 million, in the form of mortgages over the hotels Guadalpín Banús and Marbella. Nevertheless, the entity would forgive this amount entirely in exchange for a cash payment of €9.4 million and its complete dissociation from Aifos, which Lumitran has committed to.

In addition to this payment to the banking entity for the facilities, Aifos would also receive a cash payment itself. Specifically, Lumitran would pay €2.5 million directly to the developer. Another party that would benefit from this transaction is the Town Hall of Marbella. In their offer, the investors commit to taking over the obligations that Aifos holds with the Town Hall regarding the administrative normalisation of the urban situation of the Guadalpín complexes in Banús and Marbella. According to recent estimates, that would amount to €3.6 million in the case of the Village plot alone. Moreover, the municipal’s coffers would also receive funds from the investors in the form of tax revenues, such as property tax (impuestos de bienes inmuebles or IBI) and garbage tax, which have not been paid in recent times. These payments by Lumitran System would exceed €600,000.

Agreement with the bank

This proposal, which has already been agreed between the investors and Caixabank, is now in the hands of the Commercial Court number 1 in Malaga, which is conducting Aifos’ bankruptcy proceedings. The bankruptcy administrators processed the offer a few days ago and now the period has begun for its assessment, as well as for the presentation of new offers in the event that other parties are interested in acquiring the assets from the developer, which filed for liquidation in October last year.

In a letter, the bankruptcy administrators ask the court to authorise the proposal so that the sale of the aforementioned facilities in the Guadalpín hotels may go ahead. They assure that this transaction would result in “enormous benefits” for the parties affected by Aifos’ bankruptcy. And that the deal would amount to almost €60 million in total. There would be some direct revenues,  €16.1 million (€2.5m for Aifos, €9.4m for Caixabank and another €4.2m for the Town Hall of Marbella), although the most significant amount would involve the cancelation of Aifos’ debt by Caixabank.

In their request to the courts, the administrators also highlight the importance of this purchase being agreed “as soon as possible” to avoid any further accumulation of debt by both the Costa del Sol Town Hall and the bank.

Original story: Diario Sur

Translation: Carmel Drake

Botella Announces A 20% Reduction In IBI From 2016 Onwards

6 February 2015 – Expansión

Yesterday, the Mayor of Madrid, Ana Botella, who revealed last September that she would not stand for possible re-election in the upcoming municipal elections, announced further reductions in the municipal taxes, which will come into force from 1 January 2016 and will have an impact of €250 million.

The majority of the new tax relief from the capital’s Town Hall, the third announcement in two years, relates to Property Tax (IBI), which will result in an average reduction of 20% for citizens. The tax will thereby return to its levels in 2011, according to figures released yesterday by the Town Hall. This amounts to an average saving of around €78. The reduction will represent a decrease in the Town Hall’s coffers of €183 million.

This new reduction has been made possible thanks to a new surplus in municipal funds, which amounted to €1,389 million in 2014, an increase of €423 million on the previous year, according to the preliminary year end figures released yesterday.

As well as enabling new debt repayments and the allocation of more funds for investment, the new surplus will provide support to the accounts of all of the Public Administrations. The Town Hall will alone contribute more than one tenth of GDP to offset deviations from the rest of the State’s deficit, to boost the achievement of its objective.

The municipality’s remaining cash amounted to €386 million at the end of 2014, slightly below the figure in 2013 (€406 million), of which €334 million related to a loan from the Supplier Payment Fund, says the council.

In addition to the decrease in IBI, the Town Hall announced other reductions. It will apply a 7% reduction in the municipal capital gains tax, which will mean lost revenues of €52 million for the city’s coffers from 2016 onwards.

Botella also announced changes to the Tax on Construction, Facilities and Building Work (ICIO) with a discount of up to 95% for building works whose cost does not exceed €150,000, from the second quarter of 2015 onwards. Building works costing up to €300,000 will receive a 50% discount, whilst those amounting to less than €500,000 will receive a 25% discount. A 100% exemption will also apply to the planning permission fees linked to such building works. This measure will have an impact of €13 million.

The City of Madrid recorded total debt of €5,936 million at the end of 2014, compared with €7,000 million a year earlier.

Original story: Expansión (by B. García)

Translation: Carmel Drake