“We Can’t Pay Our Property Taxes Because They’ve Increased 80,000%”

Navalcarnero Property Owners Affected by Real Estate Tax ChangeNavalcarnero property owners affected by property tax hikes. Photo by Carlos Rosillo.

“We Can’t Pay Our Property Taxes Because They’ve Increased 80,000%”
Some 300 proprietors of reclassified land in Navalcarnero suffer tax hikes
Their lands have been rezoned from rural to industrial territory despite not having any new concrete uses planned

El País: “No podemos pagar el IBI porque nos lo han subido hasta un 80.000%”
Tono Calleja reporting from Madrid February 8, 2012

José, a retired man from Navalcarnero, doesn’t understand what happened to his property tax (IBI) in 2011. In just one year, it changed from €20 to €4960. That’s an annual increase of 24,800%. “They told me I have to pay €5000 for one of my properties, and I have one more. For the last four years, they’ve let us pay just 10% of that. I only charge €600 in rent. Well, I do receive €600 more for some land I’ve leased. But with that kind of income, how am I going to pay this tax? I’ll have to sell the lands, but nobody wants them right now,” he laments.

This pensioner from Navalcarnero is one of 300 affected by a decision by the Popular Party government’s Navalcarnero team to reclassify 900 hectares of rural land in the outskirts of the city as urban land. The affected are owners of rustic farms with large quantities of planted olives. But in 2009, the mayor of Navalcarnero headed the approval of a new general plan to change everything, even though there are still 4.7 hectares left to develop from the previous plan in 2002. Overnight, hundreds of proprietors saw their farms, many of them situated more than 5 kilometers from Navalcarnero’s actual urban area, became urban without receiving any services such as water or gas. The IBI increases came out to 82,938% for the new “urban grounds”, 29,527% for the new land for tertiary usage, and 21,473% for the new industrial land. These hikes have left many property owners unable to pay their taxes.

Hence Navalcarnero decided in 2011 to cover 90% of their IBI. A spokesman for the city Consistory recognized the problem and laid the blame on the urban crisis and the land registry’s revaluations: “Hence we promise that on the first of January 2013 we will undertake a new valuation that will be more consistent with reality, because it’s clear that it will be more than 15 years before these lands can be truly urban,” he explained. A mere look at this land makes it impossible to foresee the installation of short-term housing, as these are very extensive farms that reach to the provincial limit of Toledo.

Before, if City Hall decided to reclassify land, it was as if the proprietors had won the lottery. But now it’s a burden that many owners cannot bear. The construction crisis has made the majority of the affected prefer that their land be considered rural again, or rather unsectored urban land: “that way we wouldn’t have to pay such exaggerated amounts,” maintains one of the affected who prefers to remain nameless. This man displayed an IBI receipt stating that his land’s value increased from 30,000 euros to over a million: “That’s why I have to pay 80,000% more for this bill.”

The rest of the affected consider themselves as damaged by the decision as José Pedro Pablo Pérez Gallego and Timoteo Colomo Lucas, whom we interviewed. “I have a farm with 10,000 square meters which was exempt from paying the IBI because its surface area was less than 20,000. Evening came and morning followed, and now I have to pay €1200. And that’s just for the farm,” says José Pedro, who maintains that Mayor Baltasar Santos “wants to keep the salary that taxes ensure for him.” Ana faced a similar increase: her €80 levy increased to €8000. “Ten thousand percent more. And the farms are exactly the same as before,” relates this woman who does not understand the Consistory’s decision.

But the damage from the Consistory’s rezoning of these 9 hectares is not only registered in the IBI increase. It also includes any tax that is calculated in relation to property value; “one year ago, we had to pay €15,000 to include two of my sons as owners of this farm, which cost me €8000 and which the city now values at €40,000,” indicates Ángel Sánchez Bravo, another of the affected. Timoteo’s situation is the same as Ángel’s; he explained that his father has to pay more than €6000 more for the Tax for Renting to People, “and he didn’t pay anything before.”

In order to evade this problem, the affected have collected signatures petitioning the mayor to take a step backward and classify this rural land as rural land once again. But the Consistery does not want to change the farms’ new classifications: “If we moved backwards, we’d be called idiots. It can’t be done, as the moment the general plan was approved, some links and obligations were made. If someone has bought the land since then, try telling them it’s going to be rural again. It’s infeasible; it’s impossible, and it would be a catastrophe,” said the city spokesperson, who recalled that putting the general plan into action took more than four years.

The Consistory’s vision is very different from the owners’, but it still declares that it is on its citizens’ side: “The city is not the one directly responsible for charging such high IBIs. The approval of the general plan has created a situation that none of us imagined. At first rezoning was very good for them. It was a benefit. The plan was revealed, and there were no statements against it. No one thought something like this would happen.”

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