After a review of rateable values the IBI tax will be lower in 26 municipalities in 2018

Marbella will see the greatest reduction in its rateable values this year (9 per cent).
Marbella will see the greatest reduction in its rateable values this year (9 per cent). / Josele-Lanza
  • In Marbella there will be a reduction of nine per cent and in Benalmádena four per cent, but in Nerja and Benahavís the rate will increase

If you own a property (a home, commercial premises or land) in Nerja, Benahavís, Fuente de Piedra, Alcaucín or Periana you will probably pay more for IBI tax in 2018. On the other hand, if your property is in a large town such as Marbella or Benalmádena, or in 24 small municipalities in the province such as Colmenar, Riogordo or Manilva, your IBI this year is likely to be lower.

This comes, of course, after years of suffering the effects of the 'catastrazo', when the rateable values were set a decade ago at a time when construction was booming, and then the property bubble burst and market prices plunged.

Nothing can be done about that situation now, but in 26 municipalities in Malaga province the 'valor catastral' is being reduced so taxes such as the Impuesto sobre Bienes Inmuebles (IBI) or the municipal capital gains tax which is paid when a property is sold or when somebody inherits or is gifted a property, will be lower.

This situation is due to the corrective coefficients which were approved by parliament at its last session of 2017, for the 31 councils in the province which had either requested a review or are officially entitled to apply the new values to adjust to market prices.

The measure affects the base rate for the tax, and it can be altered upwards or downwards. Although in Malaga most rateable values have dropped, the situation in the rest of the country is not as clear: in 1,296 municipalities the rate has increased, and it has dropped in 535.

Other taxes

It is worth pointing out that as well as its effects on the municipal taxes, the rateable value of a property can also affect national taxes (income and wealth tax) and regional ones such as inheritance, gifts and wealth transfers. But there are other aspects too, because as well as for tax purposes, the rateable value is also taken into account if a property owner applies for any form of public assistance, such as subsidised housing, an educational grant, a place in a home for the elderly or even legal aid.

Of the 31 municipalities affected this year, the five where the 'valor catastral' was last reviewed prior to 2004 will see the rate increase by a coefficient that ranges from three per cent in Nerja, where the last review was in 2003, and five per cent in Benahavís, where nothing has changed since 1996. In other words, the more time which has passed since the last review, the greater the increase in the rateable value of the property.

On the contrary, the 26 municipalities which updated their figures between 2005 and 2012, during the height of the property bubble, will now see the set values reduce.

In Marbella, the corrective coefficient which will be applied this year to the figures which have been in force since 2012 is 0.91; this is a reduction of nine per cent and the saving for property owners in IBI alone is estimated to be four million euros.

As an example, a property valued at 100,000 euros in 2012 will now be registered at 91,000 and this will be the value that the administration will take as a reference when calculating the base rate of every tax. In Benalmádena, the reduction is four per cent.

As a general rule, councils are obliged to update their rateable values every ten years, but this rarely occurs even though the tax office has the power to do so itself or take action against them. The municipalities can also ask for a review before 31 May each year, as long as five years have passed since the last collective valuation (in this case before 2013), and there is a substantial difference between market prices and the rateable values which are in force.