Several land value capture instruments are used systematically in Spain (Table 2.51). Non-negotiable developer obligations within land readjustment are mostly used, with differences across regional urban planning legislations and local government capacity levels. The instrument with the longest tradition, the infrastructure levy, is progressively less used due to resistance from landowners and difficulties in managing revenue collection. Strategic land management has gained prominence in recent years, with the creation of land banks and special-purpose bodies. Charges for development rights are almost never used.

Spain is a state with three levels of government: one central government, 17 autonomous communities at the regional level, and 50 provinces, 8 124 municipalities and 2 Autonomous Cities at the local level (OECD/UCLG, 2019, p. 417[1]). Municipalities, as the main actors in land-use planning, prepare and enact local plans, which, in most cases, receive final approval from regional authorities (OECD, 2017, p. 191[2]). Local officials have no discretion when issuing planning permits.

Property has a social function, which implies obligations (Article 33 of the Constitution). The constitution states that society will participate in the land value gains public entities’ urban actions generate (Article 47). The national and regional governments create the legal framework for land value capture. Most land value capture instruments fall within the jurisdiction of regions and local authorities, which translates into varying degrees of practical application.

Developers or landowners are subject to obligations to obtain approval for new development or redevelopment. The obligations consist of in-kind payments, that in selected cases can be paid in cash. They are designed to cover the cost of local infrastructure resulting from development. Furthermore, they are obliged to cede part of the buildable plots to local land management authorities. National and regional legislation establishes the general guidelines and local plans specify the obligations. The national and local governments implement the obligations, but only local governments can receive the revenues.

There are two types of developer obligations: non-negotiable obligations legally established for every new development or redevelopment in the framework of land readjustment, and, in few cases, Planning Agreements. Planning Agreements consist of non-binding obligations negotiated on a case-by-case basis, under the premise of “concerted urbanism”.

In the framework of land readjustment, developer or landowners pay obligations after obtaining urban planning approval.

In-kind obligations may include local roads, land for public facilities, public space in general, and land for affordable housing, as well as the provision of public infrastructure. In the framework of Planning Agreements, privates may also pay for off-site infrastructure. No exemptions to payment are admitted.

If the obligation consists of providing land for affordable housing units, it must be provided within the area of the plan, which can be spatially discontinuous. The units built in such land must remain “affordable” during the time set by regional legislation. Affordable housing units built under this framework are marginal in the national production of housing.

The non-negotiable developer obligations tend to be followed without major obstacles. However, the lack of enforcement capacity reduces the impact of the Planning Agreements. The lack of a national framework to regulate them in detail and provide equal treatment across regions constitutes another challenge to implementation.

Land readjustment is used for incorporating rural land in urban development as well as in urban regeneration schemes. Local governments, special purpose bodies, landowners and private real estate trusts implement such projects. The country-wide legislation dates back to 1956, but since the 1975 constitutional reform regions can enact planning laws and have passed their own legislation. Therefore, land readjustment varies among each of the 17 autonomous communities.

Local governments and private landowners can initiate a land readjustment project. Before readjustment, a consultation process is usually set in motion, involving landowners, leaseholders, tenants and informal residents (2015 Land Act). The consent of landowners is required. The consent level varies with the type of project. Landowners are not obliged to participate in the land readjustment and consequently assume infrastructure costs, but they have the option to do so. The government can expropriate the land of those who are unwilling to participate. Alternatively, unwilling landowners may receive compensation in the form of buildable plots, whose value equals the expropriation set rate. In all, expropriations are rarely carried out.

Landowners must provide a share of their plots for public improvements and services, such as affordable and social housing, utilities, schools, parks and green space (see the section on developer obligations). Also, they have to cede to land management agencies (e.g. municipalities) part of the buildable plots. The minimum share is set in regional planning acts. As a constitutional premise, the burden imposed on landowners cannot be larger than the benefits of the project. In some cases, the entity responsible for the project reserves buildable plots to be sold in the market, in order to recover part of the investments made.

After readjustment, landowners receive a plot with a value proportional to their original holdings and located on or as close as possible to their original land. However, landowners may receive a residential or commercial unit instead of their original ground plots, or, in very rare cases, jointly owned plots. In some cases, they can exchange reallocated plots for cash. Third-party investors can buy readjusted plots.

Some obstacles that limit land readjustment are landowners’ resistance, lack of administrative capacity in small municipalities and the high costs of expropriations, cash compensations and reallocations.

Strategic land management is used for urban renewal, control of urban growth and of land prices as well as to provide social housing. The national, regional and local governments all implement strategic land management and receive the revenues, directly or through special-purpose bodies. Some municipalities have created land banks for that purpose.

The government buys land, especially vacant or unproductive land, to serve the intended purposes. It acquires land in a scattered fashion in the private market. Land may also be transferred between levels of government, expropriated or even obtained in the framework of land readjustment, due to the aforementioned non-negotiable obligation.

The government typically develops the acquired land, alone or in partnership with private developers. The national government or municipalities can sign contracts of public-private partnerships, which put private developers or non-profit organisations in charge of development. Development can include basic physical preparation, provision of green spaces and construction of roads, public utilities, administrative buildings, and affordable social housing. It may also include investment in the protection of built heritage and metropolitan-wide facilities may also be made.

The government recovers investment costs through the sale of developed plots. Sales occur in public tenders involving criteria of project quality, social impact, and length of execution. The collected revenues are typically earmarked for specific purposes, e.g. enlarging the land banks.

Although there is little public land available to lease, leasing also takes place to facilitate development with public purpose and planned urban growth. There is no typical length, payment scheme or pre-determined periodic readjustments. Leasehold contracts may foresee preferential rights of acquisition in favor of renters. Public entities, non-profit entities, and projects with public purposes can be exempt from payment.

The lack of resources for land purchases and local governments’ lack of administrative capacity hamper strategic land management.

Landowners pay a levy for infrastructure improvements built close to their land and from which they specifically benefit, for example, public roads, public transport, public utilities and green space. Local governments implement the levy and receive the revenues. The infrastructure levy dates back to 1924 and regulation was last reformed country-wide in 2003 (Act 58/2003).

To identify landowners who will benefit and be charged local governments assign a score to each property. The score is calculated using distance, physical location, measures of property façades or perimeters, buildable area, volume and cadastral value. Such criteria are not specified in country-wide legislation. Taxpayers who receive fiscal benefits under international treaties may be exempt from payment (Art. 32.2 of Act 2/2004).

The levy amounts to 90% of the estimated cost of the infrastructure improvement. If the estimated cost diverges from the actual cost, the amount of the levy can be adjusted (Art. 33.4 of Act 2/2004). If the infrastructure is not provided as originally planned or within the due date, the money is returned to landowners. Usually, landowners are involved in consultations regarding public infrastructure works.

The local government may execute the infrastructure improvement alone or with other public entities. The fees may be collected independently by the other entities, up to the integrated fee of 90% of the cost (Art. 31.4 of 2/2004 Act). Companies with a long-term contract to execute public services may conduct the improvements and charge the levy. In any case, the collected funds are earmarked for the exclusive purpose of funding the infrastructure improvement or public service.

The payment is due when the improvement occurs. In large development projects with several execution phases, payment can be split. The unpaid fees may be collected by administrative enforcement (called via de apremio).

The main challenge to implementation is the administrative cost of collecting the levy, which often exceeds the revenues raised. Property owners show some resistance and occasionally appeal, complaining about the absence of specific benefits or the distribution of the fee among landowners.


[3] OECD (2022), “Subnational government structure and finance”, OECD Regional Statistics (database), (accessed on 13 January 2022).

[8] OECD (2021), “Subnational government structure and finance”, OECD Regional Statistics (database), (accessed on 25 November 2021).

[2] OECD (2017), Land-use Planning Systems in the OECD: Country Fact Sheets, OECD Regional Development Studies, OECD Publishing, Paris,

[1] OECD/UCLG (2019), 2019 Report of the World Observatory on Subnational Government Finance and Investment - Country Profiles, OECD/UCLG.

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