La Orotava, in the north of Tenerife, has not increased the Property Tax (IBI) for 18 years, which most residents undoubtedly appreciate. However, there are significant concerns regarding the lack of increases for large property owners in the municipality, particularly construction companies, major developers, and banks, as well as in fewer cases, individual owners with more than nine properties.
The General Urban Planning Plan (PGO) for La Orotava estimates that there are approximately 2,500 vacant properties in the locality. Manuel Pacheco, a councillor from the Assembly, points out that if half of these homes belong to large owners, particularly banks and well-known construction companies with fully or partially vacant developments, “millions of euros could be collected annually because the 2023 Housing Law allows for a tripling of the IBI for large owners.”
He believes this would generate significant funds which could then be allocated to enhance social policies or housing initiatives. In his view, this area has been one of the major weaknesses of CC’s management for a long time. Furthermore, he insists on the necessity to declare certain areas, such as the historic centre, as “tensioned,” which would require companies, banks, or owners with four or more properties to be regarded as large owners, enabling the tripling of their IBI payments to the council.
For the Assembly, the most disappointing aspect since the approval of the national law in 2023 is that the La Orotava government has used its uncertainties about how to implement the regulation and define what constitutes a vacant property as an excuse. Pacheco argues that these are weak justifications “because the regulation clearly outlines how it should be applied in each case,” suggesting that there has been negligence or a clear intent not to disadvantage these large owners, several of whom are construction companies with many developments in the town.
The local government’s perspective, which is preparing a report
Felipe David Benítez, the municipal treasurer of La Orotava, explains to this newspaper that the council actually approved a 50% surcharge on IBI for large owners in 2018 (“large companies and banking entities”). However, he admits that since then, this increase has not been applied in practice through the tax consortium because the Local Finance Law “did not specify, for example, what constituted a large owner or a vacant property. This changes with the 2023 law and the revised Local Finance Law, which clarifies these issues. Since then, we have been working for months with the tax consortium to gather data on how many large companies or banks own more than ten vacant properties. From this, an economic study is underway to assess the impact of the measure and determine the number of residential properties involved to consider the feasibility of implementing this measure, as it also entails administrative costs.”
The councillor adds that “it must be demonstrated that the property is indeed vacant, which can presumably be assessed through water consumption. Therefore, we will need to link the water registry with the IBI registry. This involves administrative work and costs, but we need this economic study to evaluate the measure’s feasibility, as it would make no sense if the costs exceed the potential revenue for the council, in addition to the fact that the current housing problem will not be resolved through this measure. We hope to have the study completed in a few months.”
For the Assembly, it is too late, with three years having passed since the law’s enactment without producing this report and, above all, without any increase being applied to these large owners, which they believe would significantly benefit the council if one simply considers the current PGO.
No municipality in the Canary Islands has been declared a tensioned area, despite several having formally requested it, as the decision depends on the regional government, which has consistently refused to apply the national Housing Law in the Islands.
