Taxman Has No Boundaries

The Spanish Tax Agency has sent out letters to owners of properties in over a 1.000 towns in Spain, informing them of the start of proceedings (´expediente´), regarding non-declared alterations to the construction of their property. Could either be an amplification of the square meters, or a reform that changed the registered use of the property (former shed or stable converted into living quarters for example).

Cost to pay for the catastral ´expediente´: 60 euros.

Stemming from an extraordinary ´catastral regularisation´ that was approved in 2013 and will last till 2016. In this period, over 3 million households will receive this communication from Hacienda.

Aim of this regularisation is of course to get more revenue on IBI-bills, as more square meters means the registration of a higher catastral value, and thus higher IBI income for town halls. Once the proceedings have been finalised, the owner of the property involved can not only expect higher IBI bills in the years to come, but will also be obliged to pay the difference over up to 4 previous years, plus interest.

Higher catastral value also means more IRPF to pay for non-residents or 2nd home owners and any future Plusvalia when the property is sold.

How is Hacienda going to organise this?

They will make use of aerial photographs and will check records of building licences from Town Halls to verify whether a building licence has been followed-up by a request to add info to catastral registration or not. Should have been done at Town Hall, within 2 months after completion of the building works involved, so that they could have communicated the change with the Catastro. In this case, it is irrelevant whether the owner did not report completion of the works, or that the relevant Town Hall failed to communicate the change to the Catastral Register.

Majority of cases will deal with swimming pools, sheds, guest houses, balconies or terraces that have been closed-in, garages, amplifications on ground floor. Plus those properties that have been built with intentional fraud, on non-urban terrain.

This regularisation, that affects all communities except Basque Country and Navarra, started in 2013 with just 176 towns, adding another 1000 in 2014. By sending out over 1.5 million letters this year alone, the original catastro-mapping that only exists since the eighties and was not very complete to begin with, should give a much more accurate representation of reality once the ´expedientes´ have been processed.

If you have not received a notification yet, this does not mean that you will not in the near future. Towns with big urbanisations with lots of chalets and neat rows of houses have been approached first (as more visible and easy to detect discrepancies) as well as those in coastal areas like Oropesa, Fuengirola, Benalmádena, Benidorm, Calpe or Denia.

Big cities, with large numbers of voters, will be left for last… especially those with municipal elections coming up next year… only Alicante, Murcia and Salamanca are on the list so far.

No figures have been published as to the possible revenues that will come from this regularisation, but the cost of this exercise superceeds 124 million euros, so they are assumed to amount to a whole lot more than that.

Update April 2017. By now the project has been finalised. If you want to check if your town is on ´the list´ you can do so by checking the results of the regularisation, by autonomous region or by province, then scroll to see if your town is on there.

Catastro Results Regularisation

.

Please note: The information provided is based upon our understanding of current legislation. It is not legal advice but is provided freely to enable you to be properly informed. We recommend that if you are considering taking action, you should seek professional advice.