How To Pay Less IBI Tax On Your Property In Spain
All property owners in Spain have to pay the annual IBI tax (Impuesto de Bienes Inmuebles), regardless of whether the property is in use or not. Trying to reduce the rate charged is not easy, but it is possible, take a look at what we’ve found.
Pay By Direct Debit And/Or Instalments
Most municipalities in Spain will offer a small reduction, up to 5% in some towns, if you pay by direct debit. Often the direct debit is split 60/40, with the 5% reduction applied on the second payment. Other Ayuntamientos will let you pay monthly with a reduction prorated across all months.
Even if you don’t get a reduction, paying by direct debit ensures that you don’t forget and end up paying interest due to late payment. The Town Hall is only obliged to send you a payment notification the first time you have to pay the IBI, in subsequent years reminders may be covered by the publication of an official notice.
Discounts For Families
For families that have three or more children, discounts of up to 90% of the IBI are available. The exact amount will depend not only on where you live but also on the value of your property.
Additionally single-parent families with two or more children can also request a discount in most locations in Spain.
Each Ayuntamiento in Spain can decide whether to apply or not a series of discounts for residents. You can check the specifics either on the Town Hall website or by asking at the office.
Any discount won’t be automatically applied, you’ll have to request it in order for it to be included in the following year’s bill.
Solar Panels = Discount
If you’ve installed solar panels then the Town Hall is authorised to offer a discount of up to 50%. This discount is normally applied for each of the three years following installation.
Is Your Property Exempt?
Listed buildings (patrimonio historico) or those that pay a very small IBI tax (up to around 12€) are exempt from payment. Also properties that have suffered from some type of natural disaster (such as storm or earthquake damage) could be exempt for a period.
If You Rent Out Your Property
You can deduct IBI payments from the rental income when declaring for tax purposes. In this way you‘ll pay less income tax.
Check Your IBI Bill
Many Ayuntamientos have made great claims about how they haven’t increased the IBI tax for years, or that increases have been minimal. And yet people find themselves paying higher and higher rates every year. Why is this?
The answer can be found in the different parts that make up the tax and you should check your bill carefully:
- Property Valuation. This figure is reviewed periodically and you may find from one year to another a substantial increase. However, when this happens this increase is prorated to avoid a sudden increase in the IBI.
- The applicable tax rate. This rate varies across municipalities and for those areas with better infrastructure the rates tend to be higher.
- Deductions applicable. You should check this section to make sure everything that applies to your circumstances is reflected.
If you don’t agree with your IBI bill, request amendments in writing to your local Town Hall as soon as you can.
If you receive a notification from the Land Registry that the value of your property has been increased, check it carefully. If you don’t agree with the valuation you have one month to make a claim against the decision.