Little Real Estate

The measures adopted in the Royal Decree Law 20/2011 regarding the Property Tax (IBI) do not constitute a first step in the direction to face the necessary reform of local financing . The increase in tax rates in the IBI should be part of the package of measures taken to achieve that has emerged as a priority for the government of Mariano Rajoy: achieving fiscal consolidation in all public administrations . Achieving this objective calls for containment measures and reduction of public spending, but also demand inevitably increase tax revenue.

The increase in tax rates on property tax is only a “patch” -we’ll see if effective and efficient, to make municipal public administrations are placed in positions of budgetary stability.

At the local level the Government has resorted to “how easy”, raising the IBI tax rates to increase tax revenues, as has been done at the state level by increasing the income tax, which is increasing the tax burden to income basically working.

The measure may be plausible in general terms to increase revenue in city coffers, but in my view, has some aspects that are not explained clearly or can not be easily justified from the legal viewpoint. Point out some of them.

The elevation of the IBI tax rates does not extend to all real property , only the properties of urban nature, leaving out those classified as rustic and special features. If the objective is to achieve far more revenue for the municipality , does not explain why the measure is limited to urban property, plus it will be hurt those municipalities where most of the properties of their territory to be qualified as rustic.

The different rates of increase of tax rates according to year of approval of the presentation of the values ​​determined fixing the assessed value of real estate is reasonable from an economic perspective, but I fear that discourages public authorities in especially the municipalities, to adopt the necessary measures to update cadastral values ​​. Again, the commitment to regularly update cadastral values ​​to suit the market value will be defaulted.

Excluding the increase in tax rates for municipalities whose papers were approved securities in the height of the so called real estate boom (2005 to 2007) or currently (2012) is reasonable from the perspective of tax equality , because assessed values of these properties are higher than the rest , which results in these buildings which are already experiencing a higher tax burden on the IBI.

Less justification is, however, the exclusion of buildings belonging to residential use less than half assessed value of all property of the municipality with the residential use application that will be a presentation of all values ​​passed in 2002 or a subsequent year. This can produce a phenomenon similar to so-called “jump bug” that seems unacceptable from the perspective of the principles of economic and tax equity. It is possible for a property with an assessed value higher than a euro a mean value of the municipality to apply a tax rate increase and other property with a rateable value one euro less than the mean value is not applied to the increased rate, resulting as a result a difference between difficult to justify quotas .

It has been said that with the exclusion of residential buildings belonging to the half with lower rateable value of all property of the municipality is to benefit the most disadvantaged citizens , which is saying something that means assuming that the holders with claims on the properties with a rateable value less than the average value in a municipality are the least favored in absolute terms. But even admitting the veracity of the previous assertion in the majority of cases, does not explain why not excluded also from the increased tax rates for residential use properties whose rateable value is below average assessed value of the residential buildings in the municipality where your rateable value is fixed by applying general papers approved before 2002, especially since the increased tax rate established for these cases is the highest, 10%. Are we to assume that the owners of these properties are also the poorest of the municipality? What makes them different? Does it make you different than the Borough Council where he has been promoted properties not updating the tables of property values ​​in your municipality? Should citizens bear the negative consequences of lack of diligence of its mayors?

I also find it reprehensible that the basis on which we must apply the increase in tax rates established in Royal Decree-Law is not the same in all municipalities . Indeed, if the City Council approved for 2012 a reduction in the tax rate, increased tax rate will apply on the current tax rate in 2011, ie , ignoring the exercise of regulatory authority that has made City Hall. However, when the City Council had approved in 2012 an increase in the applicable tax rate, the rate increase by 10%, 6% or 4% will apply to the tax rate approved by the City for the year 2012, that is, maintain and respect the exercise of regulatory authority made ​​by the City.

It certainly seems logical that, to avoid the intended effect of increasing property tax revenues can be seen fully or partially offset by the measures adopted by the City, but from the perspective of the autonomy of municipalities to manage their interests and power tax that are recognized in Article 133.2 of the Constitution is not very defensible this different treatment . Remember that the state measure to increase the IBI tax rates adopted in a rule dated December 30, 2011 and had not been previously announced, so there was no time material to the municipalities could adopt measures deemed appropriate around IBI taking into account the intentions of the State Government .

There are many facts that make us think that probably 50% of rent is not declared at the Treasury . According to Housing Ministry itself, in 2006 there were nearly two million rental housing. However, this year only 907 000 have been reported.

This suggests that almost half the rental income not being declared as very credible to us that from 2006 to date rented dwellings had fallen by half.

Since 2007 other controls have been implemented but have not yet proved effective. One is the obligation to reference cadastral income tax, plus the control of electricity supply in homes that have been put in place later.

But nothing seems to be effective so far, and evasion by this concept seems to be the norm. It may extend the deduction to the total of the tenants could be a way.

The trend of interest rate borrowing is on the rise, according to the Housing Credit Monitoring / CSA. However, credit demand remains stable, underpinned by longer periods of borrowing.

The increase continues… The latest edition of the Observatory of the residential market financing real estate interest rates rose 14 basis points on average in March. They are now 3.67%, except insurance and security costs. The level they enjoyed in February 2010. But the credit application did not appear affected, despite a steady increase since the last 5 months. Thus, in a climate of heightened competition between credit institutions, “the application does not appear to have suffered from these first months of recovery,” said the observatory. If a slowdown was noted on the front of credit in January, he has “regained strength in February, and March activity remained strong.”

Rate real estate trend, moving to higher rates: 214 months in March

The phenomenon of extending the loan period could explain the trend. In January, the average mortgage duration was 206 months 214 months in March cons. Younger households, which have a solvency “more difficult to ensure because of a personal contribution generally low, are most affected by these long hours, says observatory. The loans represent more than 20 years in this segment of the population 65% of production credit, a proportion was only 60.4% last November. The exact opposite for more than 65 years, for which the share of production loans of shorter duration (under 15) fell to 80.4% in March against 81.8% in November 2010.

- The revenues in rent are tax benefits in the Income Tax of Individuals. Deductible, among others, all necessary expenses to obtain the income, state taxes and surcharges, the costs incurred in the execution of the contract, maintenance and repair costs and the amounts for supplies.

- Allow an empty house has several drawbacks. On the one hand, there is a danger that it will deteriorate over time and therefore losing value. On the other hand, involves a number of expenses that must be faced without a choice such as payments received from the community and tax payments as Real Estate.
Your home as collateral.

- Having an income from the rental of a dwelling may serve as collateral when applying for bank loans, either for their own interests or those wanting to endorse.

- The Central Government and the Autonomous Communities are aware of the need to enhance the rental market and are working to facilitate the fight against bad practices of the tenants. Increasingly tenants behave better and the risk of damage to housing is not as high, although there.

property tax

When buying a home must take into account many elements, from the standpoint of investment and legal perspective. The housing price itself, the fixed rate mortgage, variable, mixed, mortgage costs, expenses of sale, verify that the property is free of charge. These are just some of the issues that a buyer must be considered and to this avalanche of data is normal left some on the road. One of the most neglected is the Real and Personal Property Tax (IBI) which is paid annually and levied on the ownership of property.

One thing you should check before signing the purchase of a home is that it is free of charge and is current on payment of IBI. Otherwise, we may find we have purchased a home with loads must pay the previous owner but can lead to attachment of property in the worst case. What usually does not usually consider is who should pay property tax to buy the house: the selling or buying.

From a strictly legal standpoint the answer is clear. Being the IBI due on 1 January, will take charge of him who owns the property on that date, regardless of who sells the house later that year. That is, to accrue the tax on 1 January, when buying the house is already due and must be paid by the seller.

All this does not mean that the seller and buyer after reaching a separate agreement for payment of IBI, such as sharing or proportional to it that each time enjoy the home during this year.