Tax due on you Spanish property: IBI

What taxes should you pay on your Spanish property?

1. IBI ( Impuesto sobre Bienes Inmuebles) property tax or council tax

2. Renta or income tax; discussed in the following news item
These taxes are payable by ' all ' owners of a Spanish property, irrespective of whether they live here or not

IBI or Impuesto sobre Bienes Inmuebles

This tax is levied by the municipality (Ayuntamiento) and must be paid by all owners of a Spanish property. With these earnings, the municipality can provide the maintenance and construction of roads, parks and the rest of its infrastructure and services. It is calculated on the capital value ( valor catastral )of the house. Each year the municipality communicates the amount owed to all taxable persons. This informative letter will be sent by post to the owner in May, June or July and the amount must be paid in September or October of each year. This can vary, as each municipality determines its own payment date.In case of late payment, a surcharge, penalty and/or interest is payable immediately. It is therefore advisable to direct debit this annual payment in order to avoid this or to go to the bank institutions listed on the letter.

From when on owed?
From the date of purchase of your property. Each property must be registered in the ' Property Register ' ( Registro Catastral). Based on this registration, the municipality receives the necessary information to determine the tax.

Note: In the case of new build property , it often takes several months up to a year before you receive the first payment invitation.

What if you didn't receive a payment invitation?
Then you should go to the municipality yourself with a copy of your notarial deed, your NIE number or resident card and your identity card to report it and thus avoid fines and surcharges.

What does IBI mean?
The IBI is a ' council ' tax on the ' capital value ' of your property. This is why 2 translations are used together, property tax and council tax. Both are correct.


How much is this tax?
This is different per municipality and amounts to 0.3 to 0.6% of the catastral/capital value of the property.

What taxes should you pay on your Spanish property?

1. IBI ( Impuesto sobre Bienes Inmuebles) property tax or council tax

2. Renta or income tax; discussed in the following news item
These taxes are payable by ' all ' owners of a Spanish property, irrespective of whether they live here or not

IBI or Impuesto sobre Bienes Inmuebles

This tax is levied by the municipality (Ayuntamiento) and must be paid by all owners of a Spanish property. With these earnings, the municipality can provide the maintenance and construction of roads, parks and the rest of its infrastructure and services. It is calculated on the capital value ( valor catastral )of the house. Each year the municipality communicates the amount owed to all taxable persons. This informative letter will be sent by post to the owner in May, June or July and the amount must be paid in September or October of each year. This can vary, as each municipality determines its own payment date.In case of late payment, a surcharge, penalty and/or interest is payable immediately. It is therefore advisable to direct debit this annual payment in order to avoid this or to go to the bank institutions listed on the letter.

From when on owed?
From the date of purchase of your property. Each property must be registered in the ' Property Register ' ( Registro Catastral). Based on this registration, the municipality receives the necessary information to determine the tax.

Note: In the case of new build property , it often takes several months up to a year before you receive the first payment invitation.

What if you didn't receive a payment invitation?
Then you should go to the municipality yourself with a copy of your notarial deed, your NIE number or resident card and your identity card to report it and thus avoid fines and surcharges.

What does IBI mean?
The IBI is a ' council ' tax on the ' capital value ' of your property. This is why 2 translations are used together, property tax and council tax. Both are correct.


How much is this tax?
This is different per municipality and amounts to 0.3 to 0.6% of the catastral/capital value of the property.

What taxes should you pay on your Spanish property?

1. IBI ( Impuesto sobre Bienes Inmuebles) property tax or council tax

2. Renta or income tax; discussed in the following news item
These taxes are payable by ' all ' owners of a Spanish property, irrespective of whether they live here or not

IBI or Impuesto sobre Bienes Inmuebles

This tax is levied by the municipality (Ayuntamiento) and must be paid by all owners of a Spanish property. With these earnings, the municipality can provide the maintenance and construction of roads, parks and the rest of its infrastructure and services. It is calculated on the capital value ( valor catastral )of the house. Each year the municipality communicates the amount owed to all taxable persons. This informative letter will be sent by post to the owner in May, June or July and the amount must be paid in September or October of each year. This can vary, as each municipality determines its own payment date.In case of late payment, a surcharge, penalty and/or interest is payable immediately. It is therefore advisable to direct debit this annual payment in order to avoid this or to go to the bank institutions listed on the letter.

From when on owed?
From the date of purchase of your property. Each property must be registered in the ' Property Register ' ( Registro Catastral). Based on this registration, the municipality receives the necessary information to determine the tax.

Note: In the case of new build property , it often takes several months up to a year before you receive the first payment invitation.

What if you didn't receive a payment invitation?
Then you should go to the municipality yourself with a copy of your notarial deed, your NIE number or resident card and your identity card to report it and thus avoid fines and surcharges.

What does IBI mean?
The IBI is a ' council ' tax on the ' capital value ' of your property. This is why 2 translations are used together, property tax and council tax. Both are correct.


How much is this tax?
This is different per municipality and amounts to 0.3 to 0.6% of the catastral/capital value of the property.

Monthly publicity in Home and Trends magazine 

Tax due on your Spanish property: Renta

What are the taxes shuld you pay on your Spanish property? 

 

1. IBI (impuesto sobre bienes inmuebles)   property tax or municipal tax ( see previous news item ) 

 

2. Renta or Income Tax 

 

These taxes are due by ' all ' owners of Spanish property, regardless whether they live here or not 

 

Renta or Income Tax 

In this Plain Language the Spanish tax declaration is dealt with. 

In Spain you are obliged to declare the income tax yourself, on your own initiative and also to pay the tax due. All this in accordance with Spanish law. Forgetfulness, mistakes or errors will be fined! That is why we advise you to call upon an experienced gestor, authorized accountant or lawyer. 

There is a separate scheme for residents and non-residents. 

 

Resident: 

You must declare annually the personal income tax, on your own initiative and before 30 th of June. It is taxed at the general progressive rates of 19 to 45 % 

 

If you own 1 house, your home residence, which is not rented out, no tax is due If you have more than one house, whether or not let, tax is due:

 

on rental: 

rental income minus the deductible costs (*) must be declared. There are tax reductions for long-term rentals. 

(*)    interest on loan 

       depreciation 3% of the cadastral value of the property (excluding land, stated on IBI) insurance, IBI, tax on waste, .. 

       commissions for rental companies and keyholder costs costs for cleaning companies

       maintenance and repairs (excluding investments / improvements = part depreciation)

       contributions Association of Owners, alarm, cleaning of the building, ..

       water, gas, electricity if this is included in the rent!

       other costs explicitly included in the rent (Internet, TV, ...)

Note

travel costs from owner and business gifts for the tenants are NOT deductible /  all costs must be proven by invoices and payment receipts /  deduction costs depreciation 3% <=> higher added value tax on sales

 

no rental: 

a flat-rate taxable income of 1.1% of the cadastral value is allocated  or 2% if the cadastral value has not been revised over the past 10 years. 

The cadastral value and the date of the last revision are mentioned on the IBI certificate.

 

Non-resident (within the EU):

When renting:

Each quarter, the rental income minus the deductible costs must be declared (same as mentioned above under resident). 19% tax is due.

 

No rental:

A flat-rate taxable income of 1.1% of the cadastral value or 2% is granted if the cadastral value has not been revised for the past 10 years. On this income 19% tax is due.

 

The cadastral value and the date of the last revision are stated on the IBI certificate.

The declaration must be submitted and paid before December 31st, on your own initiative.

 

For the sake of completeness, I also want to mention that in an exceptional case a third tax, namely the 'wealth tax', is due in Spain.

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