Firstly do not believe everything you see and read in the Media, they often present a biased view point. One of the topics that has caused the greatest controversy lately is the Law 6/1994 Reguladora de la Actividad Urbanistica de la Comunidad Valenciana otherwise known as the LRAU. It has been stated that Real Estate owners may lose part of their property or that they have to pay large amounts of money to the developer. The first thing is that, as the name of the law indicates, the areas affected are those within the Valencia region, e.g. Alicante, Valencia and Castellon. This law is not applicable to the regions of Murcia and Almeria, so the first thing to do is check if the property you are looking to purchase is located in these provinces. The LRAU classifies 3 types of land; Urbanizado (developed) Urbanizable (land for development) and Rural (rural). Around 90% of foreign buyers purchase a property already constructed or under construction, the developer owns this land. In these cases this land has been classified either ‘developed land’ and the development is completed or ‘land for development’ and the land will already have an approved development programme. The plans for the infrastructure will have been established to include roadways, electricity, plumbing etc. You can be assured that purchasing any of these residences cannot be affected by the LRAU. The law only affects land classified as ‘rural’ and basically intends that the owners of ‘rural’ land that benefit from the change of its classification are obligated to contribute to the development process. The costs incurred by this participation are more than compensated by the benefits of a substantial increase in value to the property. The isolated cases that have arisen have generally been because of corrupt application of these regulations.
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