3 million properties to have rateable values increased

The increase in VAT and the expected increase in electricity bill will not be the only charges they will face some homes in the coming months. As stated in the draft State Budget presented by the government this weekend, the Ministry of Finance plans to review the assessed value of nearly three million homes in 2013, which in many cases will imply an additional tax burden to many families. Notifications of the Ministry are used by municipalities to prepare the local taxes.

As established in the public accounts presented recently, 2,839,510 urban properties will be reviewed and updated. Although many sources are stating that property prices have fallen by around 30% since the crisis began in 2008, it is normal that the rateable valuation of the property increases as it can take more than a decade between review and revision.

In any case, it will the mayors who ultimately decide how these increases will impact the voters. For example, Madrid decided to tackle the rise within a decade in 2011, after the report of the General Directorate set a 74% increase in property values. In several cases, some municipalities have opted not to run the update.

The program for 2013 also includes major changes in rural land data in up to 400 municipalities, in order to adjust the valuation of the properties to the system established by the Common Agricultural Policy (CAP).

It should be noted that changes to the assessed value of property will have an impact on different tax figures, including income tax, wealth tax, inheritance and gift tax and property transfer tax.

Regards
Andrew Belles

One Response to “3 million properties to have rateable values increased”

  1. The Government has approved a general increase in property tax rates (depending on when the ‘valor catastral’ was last revised. IF last revised before 2002, expect and increase of 10%, between 2002 and 2004 exepct a 6% increase and between 2008 to 2011, a 4% increase.
    Up to the townhall whether we can a full increase or whether it is done incrementally over several years (i believe up to 10 years).

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