The inspections of villas, apartment blocks and land in the countryside which the tax authority has been carrying out since the end of 2014 have revealed 87,143 cases of fraud in Malaga province, in the form of new constructions, reforms or changes of use of buildings which have never been declared for tax purposes.
The idea behind the 'Plan de Regularización Catastral' was to identify buildings for which the proper amount of tax was not being paid, and it has involved orthophotos, aerial images and personal visits to almost every part of the province.
With only Benahavís and Campillos still remaining to be inspected, of the 1.42 million properties checked in four phases of the plan, 87,143 (6.1 per cent of the total) were found to have escaped the eyes of the tax authorities because neither their owners nor the local town halls had registered them, independently of whether or not they had been granted a building licence and occupancy certificate.
The most common irregularities discovered during these past three years were plots of land upon which houses had been built, toolsheds which had turned into villas, terraces that had been enclosed to create another room or extensions to create a garden, parking space or swimming pool.
These discoveries have important financial consequences: the larger the property, the higher its rateable value, a variable which is used to determine how much has to be paid in state taxes (income and wealth), regional taxes (inheritance and transfers) and council taxes (IBI rates and 'plusvalía' increased land-value tax).
Once these owners have regularised their buildings, they will have to pay an average of 150 euros more in IBI, and possibly another 600 euros in back payments for the past four years, as that is the maximum period for which they can be charged.
A boost for the public coffers
For many people this will be a large sum to find all at once, but it is excellent news for town halls, who will now receive extra income without having to do anything for it. In terms of IBI alone, for example, the municipal coffers in Malaga province, could be boosted by about 65 million euros.
Obviously, the financial impact will not be the same for all the property owners, because the increase in IBI will depend on how much the rateable value varies (building a house is not the same as putting a swimming pool in, for example).
There is one fixed charge which everyone will have to pay: 60 euros, to cover costs such as the aerial photos taken by drones or satellites, or the physical inspections.
Although the authorities insist the aim of this plan was not to make money, it is a fact that 5.2 million euros have been charged so far in Malaga province. It should also be pointed out that although nobody regularising a property under these circumstances will be fined, town halls and the regional administrations can issue sanctions for works which were carried out illegally. However, this can only be applied for the past six years.
It should also be noted that under a law called the 'Ley del Catastro Inmobiliario' property owners are obliged to declare new constructions and modifications (including change of ownership) correctly, and fines of between 60 and 6,000 euros can be imposed if they fail to do so, depending on the severity of the offence.
The inspections revealed different types of offence, but the most common overall were extensions and modifications (adding another storey to a house, for example, or enlarging the garden). These amount to about 38 per cent of the total (33,114 cases).
There were also 29,628 cases (34 per cent of the total) of new constructions of houses or storerooms, 21 per cent (18,300) undeclared reforms or changes of use, such as enclosing terraces or modernising an old house, and 21 per cent (5,228) were swimming pools which had never been declared.
At the moment, the tax authority has only released the results of the first two phases of the plan, which was applied to 42 municipalities (the whole of the western Costa del Sol, Malaga city and the Guadalhorce and Antequera regions).
In Malaga city, 13,050 properties have been regularised (half of them had been extended or reformed), followed by Mijas with 4,357 (43 per cent were new constructions), 3,931 in Antequera and 2,616 in Vélez. In the Axarquía region it is noticeable that three out of every four cases involved new constructions, most on rural land.
Although it is a smaller municipality, it is striking that in Álora 2,144 properties are having to be regularised.
Benalmádena and Cártama are also noteworthy because one in every four cases involved a new swimming pool, and in Torremolinos extensions and modernisations accounted for 72 per cent of this type of tax fraud.