More than 4,300 municipalities have already regularized properties. Revenue from property tax has risen by 1,254 million for this reason
Some 6,331 municipalities have resorted to the Land Registry, the body that records the characteristics of all properties, to discover illegal constructions that citizens have not declared and for which they should pay taxes (IBI, gains …).
To date this agency under the Ministry of Finance has helped regularize using the images obtained from satellites and other aerial photos 1.7 million buildings of more than 4,300 town halls.
The extraordinary cadastral regularization process opened in 2013 when the government allowed to legalize buildings in exchange for a fee of 60 euros. Since then, the collection of property tax has risen by 1,254 million.
Most of the illegal constructions are extensions of houses, terrace enclosures, roofing attics, supplementary to the main dwelling buildings, inches added to the garden or villa and swimming pools that were not declared in the relevant municipalities.
Land Registry statistics shows curiosities like Barcelona and Granada, which are the two Spanish provinces where more irregular pools have emerged by far after the regularization, and Almeria, Granada, Huesca, Albacete and Ourense is where most new buildings have been found.
December 31st 2016 is the deadline to qualify for the extraordinary process of cadastral regularization that began in 2013 and 78% of all the municipalities of Spain have already begun the review process. The PP government introduced an amendment to the budget of that year to allow this kind of real estate amnesty. Taxpayers legalize their property by paying only 60 euros.
The measure was criticized as unfair by the opposition because it costs the same to regularize the expansion of a farm than the expansion of a luxury villa in Marbella.
Since then, 6,331 municipalities have requested assistance from the Land Registry to draw an accurate map of the buildings of the municipality. And until last week 4,340 municipalities had closed the process and had regularized 1,691,000 illegal constructions.
Rate of 60 euros
Through aerial photographs or images taken by satellites, the agency of the Treasury checks amendments presented by the property. Sends the info to the Consistory and notifies the citizen to regularize the situation of his property by paying 60 euros.
These structures are irregular because they are not registered with the Land Registry, but they must meet the planning requirements of each municipality.
Thus, abuses are avoided and homes that do not meet the regulations can not be legalized. Therefore, the Cañada Real Galiana in Madrid, where there are about 40,000 illegal dwellings, is not affected by this cadastral regularization process.
This process increases the income of the municipality through the rate of 60 euros to regularize and through increased property value, to compute more meters, for purposes of calculating the property tax (IBI).
Ceuta, Málaga, Pontevedra (Vigo), Huelva, Santa Cruz de Tenerife, Murcia and Lugo are the provinces with the highest percentage of urban and rural buildings verified by the Land Registry. Cadiz, Cordoba, Granada, Jaen, Palencia and Badajoz also have a rate above 70% , according to official data from the Ministry of Finance.
Registration of properties in each municipality has increased by 3% on average after finishing the process, which has allowed municipalities to raise 1,254 million euros in the IBI, according to Treasury estimates.
Precisely this tax is the most important for local entities. The latest data available, from 2014, shows that the revenue from this tax, which has doubled in the last decade, and accounted for almost 40% of tax revenues of the 8,200 Spanish local entities.
The IBI is the only tribute the Spanish tax system whose collection has grown throughout the years, even during the worst moments of the crisis.
In 2014, municipalities got more than 13,225 million euros for this tax on ownership of urban real estate, 6.1% more than the previous year. In fact, local authorities are the only that record a surplus since 2012 thanks to the power and regularity of this tax ..