Badia)advocats advises clients on reviewing the notifications of new property tax values set for Terrassa

Badia)advocats advises clients about the review of property tax values for Terrassa from 2018 and suggests applying to redeem leaseholds before they go up in 2018.

The Directorate General of Property Tax has started to review property tax values in Terrassa and the new ones will be applicable as of 1 January 2018. They have generally gone up although a Property Tax freeze has been agreed which means the rise will not be that noticeable in the coming financial year.

Property tax values are set based on the official table used by the local council to assess the rateable value of a property and an objective assessment of each one’s position: location, services, condition of the building, etc. However, the individual features of some properties are not always included in the official table and in these cases it has to be confirmed that the values have been correctly applied and whether the property tax regulation weightings would apply. A check also has to be made for any mistakes in the table such as the plot’s area, the gross floor area, zoning and other town planning restrictions.

We also use our review of these property tax notifications to make sure that the Land Register and the Property Tax Register are consistent. This is because following the mortgage reform in 2015, Property Tax Register data takes precedence over physical data in the Land Register to the point where property conveyances cannot be registered if the data do not match. The property tax review is a good chance to identify any such problems and ensure all the data for the same property are consistent.

The issue of leaseholds also needs to be borne in mind as there are still hundreds in the centre of Terrassa which have yet to be redeemed. The law says that leaseholds are redeemable by the unilateral decision of the landlord, i.e. the owner of the property. Long leaseholds can be redeemed by paying 4% of the value of the property; if there is no agreement about this value, the property tax value is used. Bearing in mind that all property tax values have gone up, the remainder of 2017 would be a good time to apply for release from this charge since it can be a major hindrance for conveyance or encumbrance of a property.