Badia)advocats advises GNE Finances in the development of the PACE program for Spain, with the aim of improving the living conditions of citizens and fighting climate change.

Badia)advocats participates in the development of legislative reform proposals for the PACE program in Spain.

The office’s contribution is to propose legislative reforms that allow the implementation of a program similar to the one that exists in the United States, created in California in 2008 and later extended to several US states.

This aims to achieve a new financing model that allows addressing different social challenges of great relevance, such as providing old homes with suitable living conditions, improving accessibility to buildings by people with a limiting disability, combating the climate change, by reducing CO emissions² thanks to lower energy consumption, combat energy poverty and boost the labor market and the local economy.

The rule to be modified is the Consolidated Text of the Local Finance Regulatory Law, approved by Royal Legislative Decree 2/2004, of March 5 (TRLRHL), by which the key to the success of the PACE program in the US is, without no doubt, the on-tax financing scheme, or, what is the same, the guarantee that the local public authority gives to the borrower who is going to finance the rehabilitation works.

The key to this guarantee is, in the Spanish tax system, the tacit legal mortgage provided for in article 78 of the General Tax Law, from which the IBI, by its very nature, already benefits.

Our proposal consists of creating a surcharge on real estate tax (IBI) equivalent to the quota that, in terms of capital amortization and interest, must be met during the same annual period by the property of the building in which has been executed a rehabilitation work included in the program designed for the purpose.

• Public, administrative and urban planning