IBI Property Tax: What Is It and Who Pays It?

The IBI Property Tax (Impuesto sobre Bienes Inmuebles) is a mandatory municipal tax that affects all property owners in Spain. This tax is used to finance municipal services and is calculated based on the cadastral value of the property. Whether you are a new owner or have been paying IBI for years, this complete guide explains everything you need to know about how it works, how to pay it, and what to do if you have questions.

In addition to answering the most frequently asked questions, we will also explain how to check your IBI bill online and what happens if you do not pay it on time. With this information, you will be able to manage your tax obligations more efficiently.

What Is the IBI Property Tax and When Is It Paid?

The IBI Property Tax is a municipal tax, meaning that its management and collection depend on each local council. This tax is paid annually and applies to the ownership of real estate, such as homes, land, and commercial premises. Payment deadlines may vary depending on the municipality, but it is generally an annual tax, although payment methods and deadlines may differ from one location to another.

How Is the IBI Calculated?

The IBI is calculated based on the cadastral value of the property, which is an assessment carried out by the public administration. This value depends on factors such as location, property characteristics, and land use. Each municipality applies its own tax rate, which is multiplied by the cadastral value to determine the final amount payable.

Who Is Exempt from Paying IBI?

Although IBI is mandatory for most property owners, there are some exceptions. Properties owned by charitable organizations, the State, and certain public entities are exempt from paying IBI. In addition, some rural properties and historically protected buildings may benefit from exemptions or reductions.

Paying IBI Online: How to Check and Pay It Online

Nowadays, most municipalities allow citizens to check and pay their IBI online, making the process much easier. To do so, you need to access the electronic office of the corresponding local council and have your property’s cadastral reference number at hand. In many cases, you can also set up direct debit so the tax is automatically charged every year (online IBI bill).

What Happens If I Don’t Pay My IBI?

Failure to pay the IBI can result in financial penalties and late-payment surcharges. In more serious cases of prolonged non-payment, the local council may even seize the owner’s assets. However, authorities usually offer payment facilities or installment plans to avoid extreme situations. Therefore, it is essential to stay up to date with this tax.

Frequently Asked Questions About the IBI Property Tax

Here we answer some of the most common questions about IBI.

How much IBI do I have to pay each year?

The amount depends on the cadastral value of your property and the tax rate applied by your local council. As a reference, in cities such as Madrid, the tax rate may be around 0.4% of the cadastral value.

Who pays the IBI?

In the case of a property sale, the law establishes that the owner at the time of the taxable event (January 1st) is responsible for paying the IBI for that year, unless both parties agree otherwise in the sale contract. It is common for the tax to be prorated according to the time each party owned the property during the year of transfer.

In rental agreements, there is often doubt between landlord and tenant about who pays this tax. It is usually paid by the landlord, as it is a tax that directly affects the property. However, to ensure a secure rental, it is advisable to clearly specify this in the rental contract.

The IBI Property Tax is one of the main tax obligations for property owners in Spain, and keeping it up to date is essential to avoid penalties. Take advantage of the online services offered by local councils to make payment easier, and if you have any doubts about the process or the amount to be paid, do not hesitate to contact your municipal tax office.