The Meeting was held in the Casa de Cultura, Xàbia on Tuesday Oct 2nd 2012 at 6.00pm. The Auditorium was full to overflowing. Councillor for Finance, Oscar Anton explained the background to the current situation regarding IBI.
Background
In 2005, the Town Hall requested a revision of property valuations in Jávea Municipality (the previous valuation had been done in 1994). This was carried out by The "Dirección General del Catastro" - "Directorate General of the Cadastre" a body which is part of the National Government (Ministry of Tax and Public Administration).
The valuations were found to be disproportionately high and the exercise received the nickname "Catastrazo"
(Editor's clarification: "Catastrazo" is the name given to the cadastral values report presented to the Town council in 2005. It was rejected unanimously by the Council plenary meeting, but the resolution rejecting it was not communicated to the Directorate General of the Cadastre. Very much to the contrary, the then mayor, Juan Moragues, (PP) was accused of having sent a favourable report to the Directorate. The valuation report was considered unfair since the cadastral values suffered considerable increases, in some cases up to 300%. This situation ended in a large demonstration and a political crisis which is credited with leading to a censorship motion that overthrew the then mayor. - Fom Xabia al Dia Magazine - June 8th 2006)
Both IBI (Municipal property taxes or Rates) and Capital Gains taxes depend upon the Cadastral value of a property. Therefore the Town Hall made an appeal against the 2005 valuations and in 2007 received a ruling from the Superior Court of Justice of the Valencian Community (TSJCA) which declared the 2005 valuations to be null and void. However, in asking for clarification from the Directorate General of the Cadastre, the Town Hall was informed that this only applied to Municipal property, and the Cadastre continued to send out lists of valuations for private property owners based on the 2005 valuation. Although the Town Hall disagreed, it was obliged by law to continue to issue IBI bills based on these valuations. Recently, the Town Hall tried to reduce the impact of the increased bills by cutting one of the factors used in the IBI calculations. This resulted in a gross reduction of €1.5 million in the Town Hall's income.
The legal wrangle continued and on 22nd March 2012 the Supreme Court ruled that a "ruling exists which already declared the property values null and void". (i.e. reinforcing the original ruling by the lower court in 2007). This time the Directorate General of the Cadastre agreed that the valuations were null and void for everyone.
The Town Hall had acheived a victory, but at considerable cost since in the absence of the 2005 valuations, the Directorate General of the Cadastre is using the old, 1994 property values. This has resulted in a reduction in the Town Hall's IBI income from an anticipated €20,000,000 down to €13,000,000. Property owners might expect a 40% reduction in their IBI bill for 2012.
Claiming Back Overpayment - who pays?
Since the 2005 valuations are null and void, property owners have been paying too much IBI since 2006. Who should pay the refund ? 38,000 people have the right to claim a refund with properties in urbanisations and the Arenal having been hit the most.
The Town Hall has obtained a 12 page report from SUMA (a large public body which collects municipal taxes for many municipalities in Alicante Province ) which states that "Refunds (from the Town Hall) will not be forthcoming as a result of the 2007 ruling".
On the basis of this position, if anyone tries to claim the money back from the Town Hall, it will say no. The claimant can then decide to continue the claim in court at their own expense. (Claims against the Town Hall must be lodged by December 5th 2012). This would not be worth it for small property owners, though big developers who are looking at tens of thousands of Euros of overpayment may think of taking this course. The Town Hall has already received 3000 claims.
The alternative is to claim the money back from the Directorate General of the Cadastre. The Town Hall will provide every assistance to those wanting to make this claim.
Claiming back Overpayment from the Directorate General of the Cadastre - Procedure
Claims should be made before April 23rd 2013
1. If you have a computer and Internet access
The Town Hall has prepared a personalised "live" document which claimants can complete on-line. The only information you need to provide is:
- Name
- NIE
- Catastral reference number
- Amount you paid in 2011
The rest of the information will be calculated and filled in automatically. Print the completed document and send it to the Directorate General of the Cadastre by certified post.
The form will be available on the web site around October 8th (link will be provided on this web page)
2. If you do not have a computer
Visit the Citizen's Attention Office (above the Portal del Clot Car Park) with the required information and Town Hall staff will assist you in completing the form. Then post the completed form to the Directorate General of the Cadastre by certified post.
In the event that the Directorate General of the Cadastre refuses your claim, the Town Hall will assist you in taking the claim to court. Your only expense will be notary fees to make a Power of Attorney to hand the case over to the Town Hall's lawyers. The Town Hall will have the help of a lawyer who dealt with a similar situation in Pego and who has a lot of experience in these things.
Points arising from questions from the Audience
What will happen in the future ?
The Town Hall as asked for a new property valuation to be carried out. The law has changed since 2005 and now the Directorate General of the Cadastre and the Town Hall will have mutual responsibility and the right to compare valuations.
Where will the refund money come from and when?
Each year, the Town Hall spends its income on public services and infrastructure. They also have the multimillion debt for the purchase of the underground car parks to service. There is no spare cash, and any refund to the tax payer paid by the Town Hall would have to be paid by the tax-payer. It is impossible to asses the chances of success with the Directorate General of the Cadastre. Given the current economic situation in Spain, any resolution is likely to be slow in coming.
What about the special taxes paid by non-resident property owners?
Non-resident property owners have to pay two taxes which are based on the catastral value of their property. These taxes are the responsibility of the national tax authorities (Hacienda) and queries should be taken up with them (nearest office in Denia)
Afterword from Mayor Chulvi
Mayor José Chulvi emphasised that the current course of action is the result of agreement between all the councillors and political groups working together. It should be remembered that since the "Catastrazo" in 2005, every government team in office, whatever its political stripe, has been working to overturn the wrong valuations. In this way, the council has always been on the side of the people, and the council and the people are one. The present council wanted to be sure that the people know and understand the situation and what the options are, and to be open and transparent about what is happening. The Town Hall office and personnel are there to help.
The meeting ended with applause from the audience, both for Councillor Oscar Anton and Mayor Chulví.
Reported by Chris Betterton-Jones
A report on the meeting conducted in Spanish, with more about how IBI is calculatated see (In Spanish) Xàbia al Día online magazine.
