Property Tax (IBI)
What is the Property Tax?
The IBI is a mandatory local tax that affects urban, rural, and special characteristic properties (BICES), managed jointly by the State Administration and the Local Administration. The former is responsible for cadastral management through its Cadastral Management Offices, which assign the cadastral value to each property, while the latter handles the tax management of the tax through the Town Halls or Provincial Councils (approval of annual tax ordinances, calculation of settlements, management of collection, discounts, etc.).
How is the IBI calculated?
In calculating the IBI, two elements must be taken into account. On one hand, there is the cadastral value, which is the taxable base of the Property Tax. This is an administrative value determined by the General Directorate of the Cadastre and consists of the cadastral value of the land and the construction (use and purpose, constructed area for cadastral valuation purposes, construction typology, applicable land value, urban planning conditions affecting it, among others). The other element is the tax rate applied to this cadastral value, which is determined by the municipal tax ordinances approved annually. These ordinances establish the general rates for urban, rural properties, and BICES, as well as specific rates that apply based on their main use.
The net amount, that is, the amount that the taxpayer ultimately has to pay, is not always the result of the cadastral value multiplied by the applicable tax rate. There are a series of reductions due to the application of bonuses or exemptions, as well as an annual reduction that depends on the year of approval of the municipality’s Value Report.
How can we help you reduce it?
- By reviewing the criteria for cadastral valuation set out in the regulations to check if they align with the physical and legal reality of the properties, in order to detect possible errors that imply an assignment of the cadastral value higher than what corresponds.
- By analyzing municipal tax ordinances to identify possible discretionary, requested, or automatically declared bonuses or exemptions.
- By analyzing jurisprudence, as well as regulations governing the procedure for assigning the cadastral value and the tax itself.
- By submitting documents administratively to the Administration with the aim of ensuring that the assigned taxable base is correct, as well as requesting Undue Income from the Administration that manages this tax.
- By providing comprehensive attention to all procedures before the Administration, keeping the client informed throughout the process.