Municipal Tax Collections 2008 by Martin Bright of Tropicana Properties, Almunecar
Strapped for cash; Almunecar town hall – like many local authorities in Spain – has begun to adapt it’s accounting methods and look at ways of recovering lost income. In the first instance, this year we were charged additional council contributions for rubbish collection (a set charge also based on the cadaster value of the property and calculated at 0.5%) but to compensate there was a reduction in the IBI values for 2008 in Almuñecar from 0.9% to 0.6%. Now it appears that having realised just how much revenue is being lost by town halls, essentially due to the delay in processing new build cadaster values at the provincial tax offices and consequently affecting the basis for IBI calculations for municipal taxes, then local authorities are now considering back dating the collections in order to recover lost funds.
This action is likely to effect owners on new developments in Almunecar and La Herradura that have, despite owning the property for 3 or more years, never paid municipal taxes on their homes. Homes, which nevertheless continue to contribute to the costs of the local authority, will now be asked to pay for the duration from when the cadaster was first submitted by the local authority to the provincial tax offices; and in some instances this can be 3 or more years. IBI charges (local rate) are due annually, and usually in two parts. The sum is calculated on the baseline figure assigned by the Spanish tax office for the land/property value. The value of the cadaster also incorporates the value of the building, its type, location, and use. Using this determined value, each municipal Town Hall then apportions the percentage to be charged in respect of local rates – and the formula is between 1 and 1.5% of the properties rateable value.
However do not worry too much - we are not talking about vast sums because the cadaster value is nearly always much less than the market value. For example a 3 bedroom apartment in La Herradura with a market value of 250,000 Euros paid in 2007 just 324 Euros in municipal taxes. This was based on a cadaster value of 35,850 Euros calculated at 0.90%. In the same year an independent 4 bedroom villa with 1,500m2 plot in Almunecar paid just under 450 Euros. The 2008 Almunecar municipal taxes are due now; and even allowing for the additional rubbish tax, this year contributions will increase by 0.2%. A sum that is well below Spanish inflation, currently running at 5.4%, and that remains considerably less than standard council tax rate contributions in the UK, Ireland, France or Denmark.
Martin Bright moved to this area in 1995 and has more than 30 years experience in the service and tourism sector. He joined the team at Tropicana Properties in Almunecar in January 2000. For more information on property sales contact Martin on 0034 958 630 320 or
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. His website is www.tropicanaproperties.com and http://www.spaincostatropical.com
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