Property tax not to rise by a single euro in 96.4% of homes
Property register. When it comes to paying property tax practically all households in the city will be unaffected by the overall 19% increase in cadastral values.
The first update to the property register since 2002 corrects existing inaccuracies in the value of properties in the city and makes for a fairer and more equal local tax system. There has been an overall rise of 19% in property values, which will gradually be applied to the property tax (IBI) over the next ten years, although 96.4% of households will see no change in what they are charged, not a single euro extra being charged to them in 2018.
The First Deputy Mayor, Gerardo Pisarello, explained that the update makes for a more realistic snapshot of property values. “It’s not about bringing in more tax”, he affirmed, “but rather that we’re looking to even out what each citizen pays, in line with a tax policy which must be equal and progressive and not penalise those who have had it the worst”.
Regardless of the minimal impact by the new report on cadastral values for the property tax in the majority of homes, the update has allowed for values to be modified in line with the current situation after a period of sixteen years with a property boom included.
Some 47% of properties were actually overvalued, particularly in the most vulnerable neighbourhoods, the consequence being potentially overinflated capital gains taxes on property sales. According to usage, 24% of residential property prices have dropped, compared to 69% of commercial properties, 64% of office premises and 89% of parking spaces.
The overall rise of 19% in the value of property will be applied gradually in the next ten years and is a far cry from the rises in 2001 (112%) and in other cities such as Madrid in 2011 (74%).
The values in the new report apply as from 1 January 2018 and an information campaign will be run from July to December, allowing for claims and challenges from citizens.