The Spanish subprime?
DOI:
https://doi.org/10.46735/raap.n79.682Keywords:
Inconstitucionalidad, Land Act, sub prime, land valuation, takings, confiscation, unconstitutionalAbstract
The current financial crisis appeared in the US during 2007. The core problem of the crisis was the false assessment of the value of the real estate subject to mortgages and other similar products (sub prime mortgages).
In 2007 Spain passed its new Land Act (published in the Official Bulletin on May 29), which entered in force on July 1 2008. The main reform of the Act was the new land (which was classified in two categories; rural land and developed land) valuation methodology. The new methodology caused a downfall in the land value and did not establish compensatory measures. This paper assesses whether this law is constitutional or not, and whether it contributed to the financial crisis or not.