IBI, what is it and when is it paid?

Do you own a property, premises or parking space? Then it is important that you are aware of the associated taxes that you must pay. One of them is the Impuesto de Bienes Inmuebles, known as IBI.

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IBI is levied on the ownership of real rights over a property, which must be registered in the General Directorate of Cadastre from the moment it is acquired. It is a municipal tax and it is the local council who determines its cost and is in charge of collecting it annually. At Homes by Gestilar, aware of the doubts that this tax generates in homeowners, we have prepared for you the definitive guide on IBI, in which we bring together everything you need to know about it.

IBI, when is it paid?

IBI is a tax that must be paid annually by the owners of real estate, whether they are homes, flats, commercial premises or car parks. Each town hall establishes the payment schedule and it is very important that you respect the established deadlines to avoid additional charges.

IBI, where is it paid?

The IBI payment process is carried out in the collection offices of the corresponding town hall (the one that belongs to the municipality where your property is registered).

You have the option of paying in person at these offices or more conveniently by direct debit, an interesting option that can also allow you to pay in instalments.

How is IBI calculated?

To calculate the IBI the first thing to know is the cadastral value of the property. This value includes both the cost of the land and the value of the buildings on the property. The geographical location, the market value, the urban characteristics, the cost of construction and the age of the building are also determining factors in the calculation of the cadastral value. You can consult the cadastral value of your property at the electronic headquarters of the cadastre.

On this cadastral value, the local council establishes a percentage that varies, generally between 0.4% and 1.3%. These percentages are provided by the Ministry of Finance, and within these margins, each local council has the power to set the exact value, which is known as the taxable value and is applied to the cadastral value of your property to determine the IBI.

Therefore, if you want to know how the IBI is calculated, the basic formula would be: Valor Catastral × Percentage Impositivo = Importe.

For example, if the cadastral value of your property is 150,000 euros and the town hall establishes a tax percentage of 1%. Then, the calculation to know the IBI would be:

Cadastral Value: 150,000 euros
Tax rate: 1%.
IBI amount = 150.000 euros × 0.01 = 1.500 euros

Who has to pay IBI

IBI is payable by any individual who owns real estate, regardless of whether it is a dwelling, business premises, car park or other type of property.

Which properties are exempt

Although the vast majority of real estate is subject to this tax, there are certain exemptions, as is the case of:

Properties belonging to the State, the Autonomous Communities or local entities.
Buildings that have a diplomatic or official character.
Properties belonging to the Catholic Church and certain officially recognised non-Catholic associations.
Land occupied by railway infrastructures and associated buildings.
Monuments that form part of the Spanish Historical Heritage.

Bonuses

There are some situations in which it is possible to reduce the amount of IBI to be paid:

State-subsidised housing can benefit from a 50% rebate on IBI payments for the first 3 years.
Rural properties owned by agricultural cooperatives can obtain a rebate of up to 95%.
In addition, some local councils have the power to apply special allowances, such as discounts for large families.

How is IBI paid?

The IBI payment schedule is established by each local council. Those who choose to pay in advance usually receive discounts. If there is a delay in payment, a surcharge of up to 20% of the total amount is applied.

IBI varies over time

Bear in mind that IBI can change over time, either due to updates in the cadastral value of your property, changes in the rates set by the local council or changes in tax legislation.

To avoid unpleasant surprises when paying property tax, it is essential that you keep up to date with official information from both your local council and the Tax Agency.

As you can see, the value of this tax, which is compulsory for all those who own property in Spain, can be calculated by applying the rate set by your local council to the cadastral value of the property. Remember to pay within the deadline established in your municipality to avoid surcharges and to keep yourself informed about possible variations in your locality. From Homes by Gestilar, as a proptech expert in House flipping, we love to keep you up to date with the latest news in the real estate sector and solve all your doubts.