Blogging from the Highlands of Scotland until I return to the Murcia region of Spain in early October for a few weeks
'Fair and softly goes far' - Miguel de Cervantes

Thursday, 18 October 2012

Mazarrón to lower local property tax (IBI) next year

At an extraordinary meeting of Mazarrón Council it has been decided to lower the tax rate applicable to properties in the municipality (IBI - Impuesto sobre Bienes Inmuebles) from its current 0.44 per cent to 0.42 per cent next year; it has also been decided that in households with large families (not defined in the article) and with incomes inferior to €44,000 there will be a discount granted of 50 per cent granted to such households in their IBI tax liability. There are also changes in tax rates applicable to Capital Gains (Impuesto de Plusvalía), with a reduction from 29 per cent to 17.40 per cent, and to Inheritance (trasmisiones mortis-causa [herencia]) which has had the bonus of 95 per cent restored for inheritance from close relatives, but also now 20 per cent for other urban properties.

The tax reductions and bonus adjustments will have the effect of raising less tax locally than originally envisaged in the adjustment plan imposed by the Ministry of Finance and Public Administration and will require a [further] reduction in Council expenditure, according to the Mayor "para hacer frente al Plan de Ajuste el consistorio deberá hacer un nuevo esfuerzo, reduciendo el gasto corriente del Ayuntamiento y con el fin de que no sean los ciudadanos los que tengan que sufrir aun más por las políticas recaudatorias llevadas a cabo por el Gobierno Central" (rough translation - the council will have to make renewed efforts to reduce expenditure in the light of the council's adjusted plans, to try and reduce the impact of additional taxes imposed by central government).

It is not explained in the linked article what the reductions in council expenditure will entail in what is obviously an effort to 'square a circle' and to try and and reduce hardship locally. I find it difficult to believe that there will not be pleas for some of the reduced expenditure to be reinstated once the practical effects become apparent in coming months. Local finances are already, apparently, in a very parlous state so reducing local tax collection may sound good as a way of reducing hardship (and be popular politically), but quite how it will work out in practice remains to be seen.

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