The Property Tax, or IBI, is a local tax in Spain that taxes the ownership of urban and rural properties. It is calculated based on the cadastral value of the property and varies depending on the tax rate set by each municipality. Homeowners, landowners, garage owners, and commercial property owners must pay this tax annually, which contributes to the financing of local public services.
How is real estate tax calculated?
To calculate the IBI, the council sets how much must be paid for real estate in its territory, within certain limits. A coefficient that varies between 0.4% and 1.3% is applied to the cadastral value of the property for urban properties.
To know the cadastral value of a home, you can consult the cadastre or the IBI receipt that the owner receives each year.
There are important differences between municipalities, depending on whether it is a provincial capital or the public services they offer.
What properties are exempt from real estate tax?Some properties are exempt from the payment of the IBI according to the law:
- Such as properties owned by the state, the autonomous communities or local entities related to citizen security or educational services.
- Property owned by the Catholic Church.
- State buildings dedicated to national defense.
- Red Cross property.
- The diplomatic headquarters of other countries.
- Those listed as historical heritage.
- Old buildings in large cities or those belonging to legally recognized non-Catholic confessional associations.
- Land occupied by railway lines and buildings built on them.
Who has to pay the property tax?
Most property owners, such as apartments, commercial premises or garages, are required to pay this tax annually. In summary, the IBI is paid every year for the person who owns the property on January 1.
Discounts on the payment of the IBI
The IBI tax has certain general bonuses, such as the one for officially protected housing (VPO), which enjoys a 50% reduction during the first three years, and the rustic goods of agricultural cooperatives, which are entitled to a 95% bonus.
In addition, each city council can establish additional bonuses in its municipal regulations, as is the case in Madrid for large families.
Also, some town halls apply a discount to those who domicile the payment of the receipt in the bank. This method allows you to save the fee to pay.
Where and how is the IBI paid?
It is the town hall of the municipality where the property is located that sets the form of payment, as well as the deadlines. However, there are several ways:
- Pay it online, through the website of the town hall.
- Domicile the payment to make it automatically.
- Make the payment in person at the town hall or at establishments designated by it.
Why does the amount to pay of the IBI vary each year?
The amount of the IBI may vary each year due to changes in the cadastral value and the tax rate. This is due to variations in the market value of the properties that can affect the cadastral value. In addition, each municipality can establish its own tax rate.
When is the term to pay the IBI?
The term to pay the IBI varies depending on each town hall, which establishes its own terms. However, this tax is annual, which means that it must be paid every year. For example, in Madrid the payment period is between October 1 and December 2, while in Barcelona it runs from June 1 to 30.
Who assumes the IBI payment when selling a home?
The person who owns the property on January 1 must pay the real estate tax (IBI) corresponding to that year. If a sale occurs throughout the year, the fee must be paid by the owner of the property on the first day of each annuity.
In the case of a rented house, who pays the IBI?
Normally, the owner of the property must pay the IBI, but if it is established in the lease, it can be passed on to the tenant.
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