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The authorities are starting inspections in 28 municipalities in Malaga province, to combat tax fraud and increase revenue from updated rateable values for properties
14.11.14 - 11:02 -
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Hacienda starts to comb residential estates in search of undeclared building work
Aerial view of a residential area of Marbella, included in the plan to regulate rateable values. :: J-L
Hacienda, the Spanish tax authority, is working hard to identify properties which, irrespective of whether or not they have a works licence, have not been declared by their owners or by the local town halls and registered for tax purposes.
The authorities are targeting not only newly-built properties, but also those which have undergone modernisation works and those whose use has changed: that toolshed in the country that has been converted into a luxury villa; that piece of land on which the children have built houses beside their parents’ home; that irrigation reservoir which has become a swimming pool; that extension to gain a patio at the rear; or that penthouse whose terrace has been closed in to create another room.
These are some of the alterations to properties that Hacienda is looking at, as part of the Plan for the Adjustment of Rateable Values which came into force in 2013 and will be applied until 2016 to combat tax fraud and at the same time increase the amount of money in the public coffers. Unsurprisingly, a higher rateable value means paying more in municipal taxes such as IBI and capital gains, regional taxes such as inheritance and transfers, and State taxes such as income tax and wealth tax.
This regulatory process, which is being carried out all over Spain with the exception of the Basque Country and Navarra (because in those areas the powers have been delegated to their regional governments), will pay special attention to coastal areas where there are large residential developments and rural areas with numerous self-build properties. Malaga province fits both of these categories perfectly.
At the moment the Dirección General del Catastro intends to go through 28 municipalities with a fine toothcomb during the initial phase, to check whether the registered description of the property coincides with the reality. However, sources at this organisation (which is part of Hacienda) are warning that between now and 2016 the list will lengthen considerably, because many councils have expressed an interest in joining this initiative.
This first stage will include practically the whole of the coast: Manilva, Casares, Estepona, Marbella, Mijas, Fuengirola, Benalmádena, Torremolinos, Malaga, Vélez and Algarrobo, as well as the towns in the Malaga metropolitan area (Alhaurín de la Torre, Alhaurín el Grande, Coín, Cártama, Álora and Pizarra) and the upper Axarquía region (Alfarnate, Alfarnatejo, Riogordo, Colmenar and Periana).
Aerial photos (taken from planes or via satellite) will be used and inspectors will make visits so that a true picture of each property can be ascertained; then the ‘hunt’ will begin for the people who have not fulfilled their legal obligation (under the Ley del Catastro Inmobiliario) to declare completely and accurately any new buildings or changes to those which already exist. These changes could be economic, physical or of ownership.
Updated bills
Hacienda insists that “if we all pay, we all pay less” and that it is only “fair” that all taxpayers play by the rules, denying that the real purpose of this plan is to increase rateable values in order to collect money.
In any case, money will have to be paid: there is a fee of 60 euros to update the property records. With regard to the taxes, a rateable value will be assigned to the property in question, with a date from which it comes into effect. This information will then be incorporated into the property register of the municipality and the increased charge will be applied from the following year. The owner also has to pay any amount that he or she has failed to pay in the past, or at least for the past four years, as beyond that period the matter is considered to have prescribed.
Hacienda stresses that it will not fine property owners whose rateable values are not up to date, nor will fines be issued for works that were not legal, because that matter is the responsibility of the Town Halls and regional governments. Sources at Hacienda insist that this move is an attempt “to fight fraud, by identifying properties which are benefiting from municipal services at the cost of owners who have declared everything correctly”.
The Gestha union of Hacienda workers also applauds this inspection campaign. “It is essential to reduce the amount of fraud, especially with self-build properties,” says the general secretary of the union, José María Mollinedo.