This is a charge that is similar to Council Tax or rates in the UK. It is normally payable once a year (occasionally it is billed quarterly) at the ‘ayuntamiento’ or town hall and the specific date that the charge falls due depends upon the individual town hall though is often towards the end of the calendar year.
Care should be taken when buying a property given that the purchaser should pay for only those months of the year that they own the property. If the previous owner has paid for the full year then they may claim return of that portion which they will not use.
The amount payable is expressed as a percentage of the ‘catastral’ value of the property. The catastral value is the value of the property expressed in Euros as appears in the catastro registry.
This registry is like a census of all properties in an area and the value the registry attributes to a property is taken as a reference when determining certain local administrative issues – such as the IBI tax payable.
Once the catastral value is found, the tax payable is determined by multiplying the catastral value by a coefficient or percentage. For urban property this oscillates between 0.4% and 1.1% though may be more depending on whether the property is located in the municipal capital or if more services than normal are provided.
Property owner in Spain? Need help managing non-resident and rental income tax in Spain?