IBI Spanish Property Tax

In recent years many of our clients, homeowners on the Costa del Sol, have asked us about this property tax, as the charge has increased considerably.

We thought it was appropriate to prepare an article on this property tax in order to have a better understanding of it and the reason for these increases which, logically, are affecting our pocket

What is IBI property tax?

It is a direct property tax that is applied at local level on the ownership and interests that we have in any property, whether urban, rustic or of special characteristics.

How is the charge calculated for the IBI property tax?

The charge paid by the citizen for IBI property tax depends on two variable elements, the cadastral value  and the tax rate or coefficient set by each Town Hall. To arrive at the charge payable by the property owner, the cadastral value is multiplied by the tax rate.

The cadastral value is a value for administrative purposed that appears in the official, Government-approved land register, the “Catastro” (details and statistics of rustic and urban properties) and is taken as a reference in respect of certain calculations made by the public administrations.

The cadastral value is calculated through a complicated, regulated procedure, the rateable assessment method. The cadastral value of urban properties is made up by the value of the land and of the buildings and is adjusted according to the specific characteristics of the property.

Why does the IBI property tax charge go up?

The charge for IBI property tax has gone up in many municipalities on the Costa del Sol but why does the IBI property tax increase if on many occasions the tax rate is the same as for previous years?

This is due to the variations in the cadastral value made by the official land registry (Catastro) and corresponds to an evolution of the market values of properties, the depreciation of the value of money, or the changes in local town planning. Over the past years there has been a revision of cadastral values of residential property in most of the municipalities on the Costa del Sol, which translates as an increase in the charges that we are paying for this property tax.

Every year, the Town Halls of the various municipalities charge and collect the IBI property tax. Every year we have to attend to the payment of IBI property tax within the time limit set by each Town Hall if we do not wish to incur surcharges, although we should take special care to remain up-to-date with payments of the property tax if we intend to sell our property, because we will be required to demonstrate that the property is free from this and any other charge.

MP Accountants Marbella recommends placing an order for the direct debit of this property tax and to periodically check that there is no amount that has been left unpaid, in order to avoid surcharges.

We at MP Accountants Marbella hope that we have been able to clear up any doubts about this property tax. As always, we are your disposal for any matters or requirements you might have.

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