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Apartment blocks in Malaga.
Malaga province has the third-highest cadastral values in the whole of Spain

Malaga province has the third-highest cadastral values in the whole of Spain

The effects of the last property boom are still being felt in this index used for taxation calculations and local property levies

FRANCISCO JIMÉNEZ

Friday, 29 June 2018, 12:06

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The property bubble may have burst ten years ago but the effects of the 'boom' in construction in the years before the economic crisis are still reflected in the cadastral values of properties in Malaga province. This wouldn't be that important if it were not for the fact that this variable is the one used by the authorities to decide the amount of State taxes (income and wealth), regional taxes (inheritance and transfers) and council taxes (rates and capital gains).

THE CADASTRAL VALUE

  • What is it?

  • It is an administrative value, set objectively for each property and decided by the application of a series of criteria such as the location, size, cost of construction, age, use and the price of the land.

  • Fiscal uses.

  • The cadastral value is used as a reference to decide the amount to charge in municipal taxes (rates and capital gains), regional taxes (inheritance and donations) and state taxes (income and wealth).

  • Other uses.

  • Although the original aim of the cadastral was for tax purposes, the figure is also used by the administrations to determine the financial situation of property owners who apply for assistance such as access to subsidised housing, educational grants, subsidised meals, a place in a residence for the elderly or legal aid.

Even though in recent years these have been corrected downward to adjust more to market prices, the reality is that the popularity of the Costa del Sol places Malaga third in the Spanish ranking of places with the highest cadastral values. Altogether, the 1.45 million properties in the province have a total cadastral value of 1.14 billion euros, which is an average of 78,598 euros each.

This figure, which is much higher than the national average (59,424 euros), is only beaten by the Community of Madrid (115,779 euros) and the Balearic Islands (81,234). Even in Barcelona it is lower, at 76,944 euros. According to statistics from the general cadastral authority, it is also much higher than in other provinces of a similar size such as Valencia (51,172 euros), Zaragoza (66,914) and Seville (55,397), but also in other eminently tourist areas like Alicante (45,481), Las Palmas (64,054) and Tenerife (56,601).

The values have mainly been adjusted downwards after hitting a ceiling of 90,770 euros on average in 2013, although the current figures are still far above the 49,921 euros in 2006.

This reduction has been the result of cadastral values being updated in most municipalities, either as a matter of course because this had not been done for ten years or because town halls have requested a review after five years because the values are substantially different to market prices.

The tax authority discovers more than 87,000 properties and projects

  • Average cadastral values in Malaga have not only changed in recent years due to modifications carried out by the authorities to bring them closer to market values. It has also been due to a regularisation plan which the Cadastral Department began in 2014 for new constructions, reforms or changes of use of buildings which were previously invisible for tax purposes.

  • Although the results for Benahavís and Campillos have not yet been finalised, so far the inspection which was carried out in four stages in the province has revealed 87,143 properties and projects which had escaped the notice of the fiscal authorities, independently of whether or not they had a licence.

  • The review of these will bring a boost for the authorities' financial situation, because the larger the property, the higher its cadastral value. In rates alone, the average rise in the bill is 150 euros.

For this year, the Council of Ministers approved the application of corrective coefficients in 31 municipalities of Malaga province, to adjust the present cadastral values to the real market situation. The five councils who last reviewed their values prior to 2004 (Nerja, Benahavís, Fuente de Piedra, Alcaucín and Periana) have increased the cadastral value of the properties with a coefficient of up to five per cent, while the other 26 which updated their figures between 2005 and 2012, during the property boom, have reduced theirs. These include Marbella and Benalmádena, where there are a great many properties: their figures have been reduced by nine and four per cent respectively. Other places where local residents will feel an easing of fiscal pressure in terms of property ownership are Colmenar, Riogordo, Manilva, Pizarra, Casarabonela and Valle de Abdalajís.

Other effects

The cadastral value is used as the base figure for calculating taxes such as IBI, but other variables also come into the picture including the rate of tax which is applied to the base figure. Also, when considering the impact of the cadastral values on everyday life, it should also be remembered that as well as being used for tax purposes, the cadastral value of a property is taken into account when applying for assistance such as access to subsidised housing, grants for studies, meal subsidies, places in homes for the elderly and even legal aid.

The differences are notable between different areas of the country, but looking at Malaga province it is clear that there are also major differences between its 103 municipalities. The average for the province may be 78,600 euros, but on the western Costa del Sol, especially in Benahavís, the average is 154,770 euros. That is twice as high as Malaga city (70,012) and is explained when you look at La Zagaleta, the most luxurious residential development in Europe. Although obviously not all the properties in this municipality of barely 7,350 inhabitants have the same value, the total for the 14,437 properties is higher than towns like Antequera and Ronda even though they contain twice as many properties (29,415 and 25,403 respectively).

Just behind Benahavís on the list is neighbouring Marbella, with an average of 125,350 euros, and others in the area such as Ojén (103,790 euros), Mijas (96,780) and Manilva (90,960).

Also at the top of the list is Alhaurín de la Torre, while other municipalities on the western Costa del Sol are a step further down the ranking, such as Benalmádena (88,040), Estepona (80,440) and Fuengirola (79,090).

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