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 in some cases it’s possible.

Pay your IBI by direct debit and/or instalments

Most municipalities in Spain will offer a small reduction of around 5% if you pay by direct debit. Often the direct debit is split 60/40, with the 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 tax are available. The exact amount will depend on where you live and the value of your property.

Additionally single-parent families with two or more children can also request a discount in most locations in Spain.

Municipal discounts

Each Ayuntamiento in Spain can decide whether to apply or not a series of discounts for residents. You can check the details 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

If you’ve installed solar panels then the Town Hall is authorised to offer a discount. This discount could be up to 50% off your bill and is normally applied for 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. Increases are prorated to avoid a sudden increase in the IBI tax payable.
  • The applicable tax rate. This rate varies across municipalities. For 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.

When you don’t agree with your IBI bill, request an amendment 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. You then have one month to make a claim against the new valuation amount.

Related Post: Top Tips When Renting Property in Spain