IBI (Impuesto sobre Bienes Inmuebles)

How it is calculated

IBI is calculated by multiplying the valor catastral (the fiscal value assigned by the Catastro) by a tax rate set by the municipality. The rate varies by municipality and typically ranges from 0.4% to 1.1% for residential properties, with higher rates for commercial and rural properties. A property with a valor catastral of 100,000 euro in a municipality with a 0.8% rate would pay 800 euro per year in IBI.

When it is due

IBI is billed once a year. The billing date varies by municipality. Some bill in March, others in September or October. Most municipalities offer a direct debit option (domiciliación bancaria) with a discount of 3% to 5% for paying by direct debit. If you do not pay by direct debit, you receive a bill (recibo) and must pay at a bank or the municipal tax office within the payment window.

Who pays

The owner of the property on 1 January of the tax year pays the full year's IBI, regardless of whether the property is sold later in the year. In practice, buyers and sellers sometimes agree to split the IBI proportionally in the escritura, but the municipality will always bill the owner of record on 1 January.

Common issues

The most common issue for new owners is not knowing IBI exists and discovering an unpaid bill months after purchase. The second issue is a disparity between the valor catastral and the actual property. If you have made significant renovations or extensions, the Catastro may not reflect the updated surface area, which can lead to back billing when it is eventually updated.