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 .

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.

Are exempt from property tax the following:

* The State property of the Autonomous Communities or local bodies directly affects national defense, public safety and educational services and prisons;

* The commons of the towns and mountains in hand neighborhood common

* Member of the Catholic Church.

* Those of non-Catholic religious associations legally recognized with the establishment of cooperation agreements in this regard.

* The Spanish Red Cross.

* Those of foreign governments for diplomatic or consular representation, or its agencies, on condition of reciprocity and under international conventions in force.

* Those of those agencies or entities to which the exemption is applicable under international conventions.

* The land occupied by railway lines and buildings nestled on the same grounds, which are dedicated to stations, warehouses or any other services essential to the operation of such lines.

* The declared in individual monument or historic garden of cultural interest.

* Sets protected historic, real estate forming part of National Heritage, heritage, castles protected monuments older than 100 years protected and granaries of not less than 100 years existing in Asturias.

The Property Tax, also known as “tax bill” is a fee to be paid once a year and consists of the payment to the municipality concerned by the owner of the property (house, flat, local , garage etc.) for a fixed fee.

Who has to pay?

This tax is levied on the owners of the property as of January 1 of each year.

In most municipalities, property tax is not paid until well into the year, and if housing is transferred before the taxable event occurs, it remains with the owner of it to January 1 of that year.

How do you calculate the amount of this tax?

This tax depends on the value of the real estate and the tax rate depends on the number of inhabitants in each municipality where the property is located.

In short, this tax will be higher in large cities and lower in small towns or rural areas.

I have to pay property tax in the year you acquire the new home?

Yes, but not all of the shares for that year, but only the proportionate share of the time it has owned this house in that year.

For example, if you purchased a house on July 1, 2010. A time to pay property tax that year on it for 50% of the quota allotted to him and it’s only going to own this home for half the year.

Do VPOs also pay property tax?

The social housing is also subject to this tax, except that the first 3 years have a 50% reduction in the fee.