The Catalan Civil Code will be amended later this year to prevent a medieval tax, which continues to be enforced by current legislation, from continuing to intervene with the purchase and sale of estates.
The tax, known as an emphyteutic census, is a kind of tribute of feudal origin, often associated with the purchase and sale of property, which must be paid to the nobility, as former owners of the land where the estate now stands.
Emphyteutic censuses date back to the 16th Century and allowed nobles and feudal lords to rent land to farmers for cultivation in exchange for an annual payment. The census certified that the land continued to belong to the nobleman as there was no register of ownership. As cities grew, this same tax continued to apply to houses built on the land. The tax was reactivated by a Catalan law passed in 1990 and is still in force today.
In Barcelona, emphyteutic censuses can reach up to 20% of property’s value, whilst outside of the Catalan capital, it may reach 4%. When there is a sale, the redemption must be made and this often takes property owners, who are unaware of this charge, by surprise.
According to the latest data from the yearbook of the Directorate General of Registries and Notaries, redemptions in Catalonia totaled almost 8.8 million euros in 2018. According to Vicente García-Hinojal, dean of the Association of Registrars, the censuses in Barcelona amounted to 6.88 million EUR, in Tarragona 1.57 million EUR, Lleida 332,021 EUR and 6,008 EUR in Girona. In addition to paying the census, it is also necessary to pay the redemption deed, the registration fee and other related taxes.
The removal of this medieval and outdated tax will be good news for many and demonstrates a positive step forward in Spanish property law. If you, or anyone you know, requires assistance regarding the tax, or you would like more information, please do not hesitate to contact our firm and we would be pleased to assist you with your matter.