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REAL ESTATE CRISIS FORUM COSTA DEL SOL.

Through no fault of the Junta De Andalucia the new rateable values and multiples to create new fiscal property values are blocking sales on the Costa Del Sol. Changes need to be made urgently.
Unless we move quickly this REAL ESTATE stagnation will c…

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REAL ESTATE CRISIS FORUM COSTA DEL SOL

Through no fault of the Junta De Andalucia the new rateable values and multiples to create new fiscal property values are blocking sales on the Costa Del Sol. Changes need to be made urgently.

Unless we move quickly this REAL ESTATE stagnation will continue and the backlog of cheap properties on the coast will never be cleared, to make way for a real property market and growth in the future.

What is the problem:

Primarily we all know that the World wide recession, along with a major international banking crisis have caused financial, property, and personal devastation almost everywhere in the world.

If that was not enough, coincidentally in 2006 the Spanish Central Government and the Tax offices embarked on a process of upgrading the Rateable values of property in Spain to more represent true values at that time. In addition a multiple (Coefficient) has been applied in each area to be used to calculate a new Fiscal value for each property, and therefore creating a “taxable” value on which the deed-transfer taxes could be reclaimed by the tax authority. Also potentially this “fiscal” value has tax implications at time of sale, on the capital gains taxes for Spanish Nationals, Residents and Non-Residents alike. In addition it affects Plus Valia, Notary Fees and registration costs.

If there had been no recession this realignment of the rateable values would not have affected sales, however it does bring in additional revenue to town halls as in local rates.

With the recession led reduction in Property prices of up to 50%, the reality now is that often this new fiscal value can be 40%/50% more than the real sale price. Consequently even if a buyer and a vendor agree a sale, on many occasions the deal is not completed because the new fiscal values create extra taxes for both vendor and buyer above those that should be levied on the sales price.

For Example in Estepona:

Value of property say in 2007 230,000 Euros

Rateable value at that time 55,000 Euros

Actual value of Property now 130,000 Euros

Fiscal value now 198,000 Euros

New rateable value 180,000 Euros times 1.1 (Local Coefficient)

When the potential sale collapses the Tax offices and Town halls receive no taxes on the sale, The Real estate agents do not complete a deal, The notary offices are empty, Lawyers are at a standstill, and the back log of low priced property remains untouched.

What can be done:

If the Junta de Andalucia and the tax offices agree to reduce the multiple (Coefficient) that has been created in each area, to more represent the true value of property in this difficult time, then Vendors, Buyers, Estate Agents, Lawyers, Notary office and Registry offices can start to negotiate, process, and conclude sales in this very difficult market, thus creating more taxes for the Tax office and the Local Town Halls. At the same time creating employment, increasing local economy etc. etc.

There is an easy way of solving this dilemma by temporarily reducing the multiple (Coefficient) in each area. Each Town Hall area has a different multiple applied, however for example in Estepona the multiple is 1.1 times the new rateable value in thje exmple above , if this was reduced to say 0.7 for the next 2 or 3 years the problem would be solved. More sales completed, and more taxes would be generated in these difficult times, and at the same time the stagnant Costa Del Sol Real Estate Market could begin to move again. This would not affect the income to council on rates.

This proposal will be presented to The Junta de Andalucia, The Local and Municipal tax offices and Individual Town Halls

We are collating support from Local Real Estate Agents through Infocasa associates, Associations of Real Estate Agents, Notary public offices and their representatives, Lawyers and their representatives, Local & Regional Banks, Any other parties who are interested in the future wellbeing of The Costa Del Sol and Andalucia

In addition to letters and presentations to the above, and publication of this letter in the Spanish and English press there was a special Radio program on Talk Radio Europe in English before Xmas, that will be followed by Spanish & English radio presentations in the near future.

In attendance for the Forum launch was Alan James President of the Experience Group of companies 40 years experience in Real Estate in Spain. Allyson Middleton CEO Experience Group Real Estate Division, Pablo Sanchez Pavon Marbella Lawyer N H Lawyers Marbella, Jose Maria Garcia Urbano Notary Public and candidate for Mayor of Estepona. The program was well received and the phone in that followed was interesting.

Future Radio & TV programs in English and Spanish will continue in the New Year.

Support is coming in rapidly but we need your support as well. We are creating a database of interested parties that will support this important cause and sign a letter which will be presented to the relevant authorities.

CAN IT BE DONE?. WELL WHO KNOWS BUT SITTING ON OUR HANDS IS NOT AN OPTION.

The aim is to prepare a letter with widespread support for the proposal to be presented to The Junta De Andalucia as soon as possible to encourage the proposed change in the Coefficient, and get our property market moving again.

To offer your Support please e mail. allyson@experiencegroupspain.com or alanj@experiencegroupspain.com Or Tel 952 883168, 617403103, Fax 952 883813

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