What is IBI? Property Tax Guide
Understanding the annual Spanish property tax that all owners must pay.
What is IBI?
IBI stands for Impuesto sobre Bienes Inmuebles - literally Tax on Real Estate Property. It's an annual local tax paid by all property owners in Spain, regardless of residency status.
It's similar to council tax or property tax in other countries. The revenue goes to the local town hall (ayuntamiento) to fund municipal services.
You must pay IBI whether you use the property yourself, rent it out, or leave it empty. There's no exemption based on property use.
How IBI is Calculated
IBI is based on the property's valor catastral (cadastral value) - an official valuation determined by the Catastro (land registry). You can look up your property's value on their website.
Each municipality sets its own tax rate (tipo impositivo), typically between 0.4% and 1.1% of the cadastral value.
The formula is: IBI = Valor Catastral × Local Tax Rate. A €100,000 cadastral value property in a town with 0.6% rate would pay €600/year.
Payment Schedule
Payment dates vary by municipality - some bill annually, others quarterly or biannually. Check with your local town hall for exact dates.
You can usually set up direct debit (domiciliación) for automatic payment, often with a small discount.
Keep IBI receipts as proof of payment - they're useful for tax deductions on rental income and when selling the property.
Who Pays IBI?
The owner registered on January 1 each year is responsible for that year's IBI, even if the property is sold later in the year.
When buying, negotiate with the seller about prorating the IBI for the purchase year - but legally the January 1 owner is liable.
If you don't pay, the town hall can add late fees and eventually place a charge on the property.
IBI and Other Taxes
IBI is deductible from rental income for both residents and EU/EEA non-residents. Keep your receipts as proof of expense.
IBI receipts are often requested when selling property - buyers want to see the property taxes are paid up to date.
The valor catastral shown on IBI receipts is also used to calculate imputed income tax for non-residents when filing Modelo 210.
Disclaimer
This guide is for informational purposes only and does not constitute legal, tax, or financial advice. Tax laws and regulations in Spain may change, and individual circumstances vary. We accept no liability for decisions made based on this information. Always consult with a qualified tax professional for advice specific to your situation.