Málaga is the Province with the Third Highest Cadastral Values in Spain

25 June 2018 – Diario Sur

The real estate bubble burst a decade ago, but the effects of the boom that the property sector experienced before the crisis are still reflected in the cadastral values of the assets in the province, a circumstance that would not be so important, if it wasn’t for the fact that this variable is the one that the administrations use to set the tax rate for the state (IRPF and property), the region (Sales and Transfers) and municipalities (IBI and capital gains). Although in recent years, those values have been corrected downwards to reflect market prices, the reality is that the strong pull of the Costa del Sol places Málaga in third position in the national ranking of Spain’s highest cadastral values. Together, the 1.45 million properties registered in the province have a total value of €114.1 million, which translates into an average of €78,598 each.

That average, which is well above the national average (€59,424), is exceeded only by the Community of Madrid (€115,779) and the Balearic Islands (€81,234), and comes ahead of Barcelona with an average €76,944. According to statistics managed by the General Directorate of the Cadastro, the differences are also more than considerable compared to other provinces of a similar size, such as Valencia (€51,271), Zaragoza (€66,914) and Sevilla (€55,397), as well as with other predominantly tourist areas, such as Alicante (€45,481), Las Palmas (€64,054) and Tenerife (€56,601).

The trend in recent years has been downwards after the peak of 2013 (€90,770 on average), although the current figures are still a long way from the €49,921 that was registered in 2006. That reduction is the result of the updates to the cadastral figures that are being made in most municipalities, be it because they are due because ten years have passed since the last update, or because the Town Halls have requested them once five years have passed and provided substantial differences exist vis-à-vis market prices (…).

Whilst the differences are notable between different parts of the country, if we zoom in on the province of Málaga, we also see significant variations between the 103 municipalities that comprise the province, where the average is €78,600. The western coast takes the biscuit with Benahavís in the lead, with an average of €154,770. That figure doubles the average for Málaga capital (€70,201) and is explained by La Zagaleta, the most luxurious urbanisation in Europe. Although clearly not all of the properties in this municipality of barely 7,350 inhabitants have the same value, the 14,437 properties there have a combined value of €2.2 billion, placing it above cities such as Antequera and Ronda in the ranking even though those towns issue twice as many receipts (29,415 and 25,403, respectively).

Just behind Benahavís is neighbouring Marbella, with an average of €125,350, and other towns in the area such as Ojén (€103,790), Mijas (€96,780) and Manilva (€90,960). Alhaurín de la Torre also sneaks into the top of the ranking, whilst on the next step down are other municipalities on the west coast such as Benalmádena (€88,040), Estepona (€80,440) and Fuengirola (€79,090).

Original story: Diario Sur (by Francisco Jiménez)

Translation: Carmel Drake

New Tax Rules Increase IBI Charge In 11 Provincial Capitals From 2017

5 December 2016 – Expansión

Property owners in some of Spain’s largest cities will start the new year with a tax blow. The Royal Decree that was approved by the Council of Ministers on Friday and published in the BOE on Saturday contains…a measure that will significantly increase the Tax on Real Estate Assets (IBI) in hundreds of towns, including in eleven provincial capitals, specifically: Valencia, Alicante, Badajoz, Cádiz, Córdoba, Teruel, Granada, Jaén, Huelva, Tarragona and Huesca.

This tax will accrue from 1 January 2017 and will depend on the cadastral values, given that they form the taxable base for the IBI calculation. The Tax Authorities have approved updates to these values in 2,452 towns, i.e. in almost one third of the towns in Spain.

The Town Halls set the cadastral values on the basis of value proposals performed by the Catastro. However, all of the property values (homes, garages, premises, offices, hotels, etc) affected by proposals made prior to 2004 will be revised upwards, with coefficients ranging from 1.03 to 1.08, according to the Royal Decree from the Tax Authorities.

For example, in Córdoba, whose valuations were last reviewed in 1995, the update will be 1.06. Thus, if a home had a cadastral value of €100,000 in 2016, it will have a cadastral value of €106,000 in 2017. The IBI payments will increase without the need to raise the tax rate. In Valencia, whose valuations were last reviewed in 1998, the coefficient will be 1.04.

Most of the towns that requested the review, which seeks to reflect property values to 50% of their market price, did so to increase their coefficients and, ultimately, to increase the IBI raised without changing the tax rate . Many of the affected towns have not reviewed their values since the real estate boom, or even earlier. In fact, numerous town halls have not updated their valuations since the 1980s.

The valuations last performed between 2005 and 2011 will be updated with a coefficient of less than one, of between 0.87 and 0.92. They include four provincial capitals: Almería, Santander, Lleida and Ávila.

The reason for the measure

(…) For the avoidance of doubt, the Royal Decree explains that the measure “is necessary given that it contributes to strengthening municipal financing, tax consolidation and budgetary stability for local entities”. In other words, it is a necessary measure to balance the deficit. (…).

Original story: Expansión (by Juanma Lamet)

Translation: Carmel Drake