The Dual Land Registry: Fiscal Revenue, Property Rights, and Unequal Formalisation in Spain, 1845–1932
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In this blog post Juan Carmona Pidal (Universidad Carlos III de Madrid) and Joan R. Rosés (London School of Economics and CEPR) present their research, some of which will be presented at the upcoming EHS Conference.
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In 1861, Spain set out to modernise its land system. The new Mortgage Law established a nationwide property registry designed to bring legal certainty to land ownership, unlock rural credit markets, and drag an agrarian economy into the liberal era. On paper, it was a promise of equal protection for all property owners. In practice, it became a machine that systematically favoured the wealthy and locked smallholders out of the formal economy. This paper traces that story across nearly a century of institutional history, and the lessons it offers reach well beyond nineteenth-century Spain.
A Registry Built on the Cheap
The architects of the 1861 reform faced a fundamental problem: the Spanish state could not afford to pay for what it wanted to build. The solution, what the authors call the “saving option”, was to make the registry self-financing. Rather than funding it from general taxation, the government handed it over to professional registrars who would cover their own costs through fees charged on each transaction. No new public buildings, no salaried officials, no comprehensive surveys.
This decision had profound consequences. Registrars had every incentive to concentrate their efforts where the money was: wealthy urban districts with high-value properties and brisk transaction volumes. In poor rural areas, where plots were tiny and values low, fees barely covered costs. The result was predictable: rapid registration in Madrid and Andalusia, sluggish adoption in Galicia and Asturias, where fragmented smallholdings made the whole enterprise barely viable.
Three Gates, All of Them Expensive
To register a property in Spain, you did not just pay a registrar. The system required passing through three separate cost gates: notarial fees for drafting the underlying deed, registrar fees for the inscription itself, and transaction taxes payable to the Treasury. Each was administered by a different institution and followed its own political logic and reform timetable.
The cumulative burden was crushing for small landowners. For a plot worth 50 pesetas, the combined fees and taxes consumed roughly 40 per cent of the transaction value at the registry’s establishment in 1861. By the 1930s, that figure had surpassed 60 per cent. For a 5,000-peseta plot, the burden stayed comfortably between 5 and 10 per cent throughout the entire period.
Successive reform cycles in 1863, 1887, and 1920 offered temporary relief, but none addressed all three cost components at once. The 1887 reform significantly reduced registrar fees, but notarial charges and transaction taxes remained unchanged. Costs rebounded. The structural regressivity survived every intervention.
A Fiscal Instrument in Disguise
Here lies the paper’s most striking argument: the state had a financial interest in keeping things as they were. As the nineteenth century progressed, transaction taxes collected through the registry became an increasingly vital source of public revenue. By the 1920s, they accounted for nearly two-fifths of all property tax income in Spain.
The alternative, the direct land tax based on cadastral valuations, was essentially broken. Spain’s fiscal cadastre relied on self-reported declarations by property owners who had every incentive to understate their wealth, while local elites who controlled the assessment process had every incentive to let them. Cadastral values stagnated while real land prices rose.
Transaction taxes, by contrast, were levied on the declared value at the time of transfer. As land values rose, especially during the economic boom of the 1910s and 1920s, so did revenue. The state had stumbled upon a mechanism that worked precisely because the cadastre did not. And the more it depended on that mechanism, the less inclined it was to reform the fee structure that generated it.
A Geography of Exclusion
The regional evidence makes the story visible on a map. Provinces with large holdings and high land values, principally in Andalusia and along the Mediterranean coast, registered transactions at rates far above the national average, and that lead widened decade by decade. The fragmented smallholder regions of Galicia, Asturias, and the rural north remained consistently at the margins of the formal system, unable to use land as collateral and cut off from mortgage markets.
This geographic divide was not narrowed by the fee reforms of 1887 or 1920, nor by broader economic recovery. It was structural, rooted in plot size, land values, and a cost architecture that no marginal tariff adjustment could overcome.
A Warning for Today
Across the developing world today, land formalisation programmes face strikingly similar dilemmas: how to build inclusive property systems when fiscal constraints push toward self-financing models, and when the state derives revenue from the very fees that exclude the poor. The Spanish case shows what happens when those incentives go unaddressed. A registry that works well where it is least needed, and poorly where it is most needed, does not reduce inequality. It entrenches it. Institutional survival, as the authors put it, came at the price of institutional equity.
To contact the authors:
Juan Carmona Pidal
Universidad Carlos III de Madrid
Joan Rosés
London School of Economics and CEPR
