This is a website for buyers, owners, and sellers of property in Spain, offering reliable information and resources to help you get things done with confidence. It is run by Mark Stücklin, author of the Spanish Property Doctor Column in The Sunday Times (2005-2008), and the book ‘Need to Know: Buying Property in Spain’ published by Collins.
The municipality of Catral, in the Vega Baja region of the Valencian Community (South Costa Blanca) is infamous for its problem with illegally-built homes, 1,300 of which were built and sold to Britons and other foreign buyers between 2000 and 2007. The problem was so bad that 2 years ago Valencia’s regional government suspended Catral’s urban plan as a first step towards sorting out the town’s urban planning chaos. But now, almost 2 years later, the Spanish press reports that no further progress has been made, and owners of illegally built homes remain trapped in legal limbo.
The town hall, now run by the right of centre Popular Party (like the Valencian Government), can at least point to some evidence of an effort to address the problem. Over the last couple of years it has drafted 4 urban plans, 3 of which were rejected, and the latest of which will be considered by the Valencian government this month. The Valencian government, on the other hand, has done nothing other than issue 217 charges for urban planning infractions.
Aurelio David Albero, Catral’s Mayor, is confident that the latest plan will be approved, but has no idea what it will cost.
“Whatever it costs [to legalise homes], our objective is that builders, developers and owners will foot the bill, but not the owners of legal properties, nor the farmers that have kept out of the urbanisation business,” Albero told the Spanish press.
Albero also admits that illegally built homes are a burden on the local economy. “They are owned by residents who don’t pay any taxes, but who enjoy services such as rubbish collection, postal services, health and education, all of which has pushed the town hall into debt of 1.8 million Euros.”
Whatever the final cost of legalising homes in Catral, that end appears as far away today’s as it did 2 years ago.
TBear says:
The situation re debt and unpaid taxes in Catral is not as clear cut as the mayors comment (IF correctly quoted), makes it seem.
In short those in the illegal house are not the major cause of the town halls debt problems.
Collecting all the relevant normal legal taxes will do very little to sort out Catral’s debt problem.
Below is some explanation of why this is true.
The SUMA office toured the countryside of Catral about 3 years ago, logging details of all homes there. As a consequence they issued IBI (rates) Basura (rubbish) bills and rustic land tax to hundreds of homes, including illegal houses and old Spanish fincas.
In many cases backdated by 3 years. These bills have been and continue to be paid.
When the rest of the homes are legalised there will be the opportunity to back date the tax (SUMA) bills for these houses too.
Nearly 400 of these illegal homes have not been sold yet, so are not due to pay taxes yet and do not use the services either yet.
Even if the remaining illegal houses did pay tax and rubbish it would not equate anywhere close to 1.8 million Euros. Let’s say 600 of the 1,200 houses have been sold and do not pay their taxes at current levels, the revenue each year would only equate to 204,000 euros per year. (300 euros IBI, 30 euros basura, & 10 euros rustic land tax per house).
For the past 4 years no new homes have been able to arrange to the door postal services. Some did arrange this service in the past and still do, but only a couple of hundred at the most. The rest have to rent a box at the post office or from the town hall, both of which are paid for by the home owners directly.
The majority of the expat families are elderly so do not actually need to use the school services. Those hundreds that do pay more than cover for those that do need this service. There are less than 40 EU students in the local schools at the moment, some of whom live in the town and whose parents do already pay SUMA taxes.
Health care is a real issue, it is heavily used by those EU citizens old enough to leave the UK system and join the Spanish system. But bear in mind a significant number are not old enough to leave the UK system sohave to use private health care.
Some work and contribute cash to the Spanish social security system that way, many EU retirees also pay income tax in Spain.
The UK pays the Spanish government a yearly cash sum for each UK pensioner Spain takes care of. Each town hall receives funding for every person registered for health care in their town too from the Spanish government regardless of that persons nationality.
The town hall only contributes to some health services, like GP’s. If someone is seriously ill, then they use services paid for by Valencia and the national government. So the town halls exposure to additional costs is limited, with all residents.
Lastly, where has the revenue already paid to the town hall in the past 6 years for fencing licences, and in a few cases building or renovation licences gone.
In addition at least 269 houses received heavy fines in these 6 years, all of which the builders paid. A total of over 12 million euros in additional revenue over 6 years for the town hall. Where then did the 1.8 million debt come from, only a percentage of it is from unpaid
taxes, or can be recovered this way.
Factor in those residents living full time in Catral spending in bars, restaurants, shops and supermarkets, cleaners, carers, and gardeners based in Catral, which all pay local rates and employ people from Catral regardless of their nationality. You can see that overall these people do not represent a financial drain on the local community. In reality it is the opposite.
The majority want to be legal and pay their taxes.