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Taxes on Foreigners in Spain

Taxes on Foreigners in Spain

4. IBI - the yearly rates

IBI (Impuesto de Bienes Inmuebles) is the name of the local property tax. It is based on the "valor catastral" (fiscal value), determined by the "catastro" (cadaster office in the provincial capitals). br>br> The valor catastral is revised every 10 years, and adjusted every year in relation to inflation. This yearly tax is 0,4% on residential property (fincas urbanas) and 0,3% on agricultural properties (fincas rusticas). However, municipalities may increase this percentage in accordance with the number of inhabitants and the services given. br>br> Often the IBI (and sometimes other local taxes or charges) are being collected by provincial tax collection agencies. For instance, in the province of Alicante, the agency SUMA collects most of the local taxes for most of the municipalities.

It is recommendable to have a standing order for the IBI payment with your Spanish bank. Special forms for doing so can be found in the banks, as well as in the town hall or tax collection office.

IBI - local property taxes

When you own a property in Spain, you must pay local property taxes, called IBI. We tell you how to register for IBI and how to pay.

IBI (local rates) is a municipal tax which has to be paid every year by owners of homes, premises, garages or plots, i.e, any urban property or buildings and also by owners of agricultural land or buildings.

The amount of your yearly payment is determined by the value assigned to your property by the administration - known as Valor Catastral (rateable value). The rateable value of your property is calculated on the value of both the land on which your property is built and the building itself.

The tax rate which has been approved by each Town Council - and which is the same for all properties within the municipality - will be applied to this rateable value. For example:

Rateable value Local tax rate Yearly payment
30.000 Euro x 0.8% = 240 Euro

How to read your IBI bill

Organismo = Part of administration
Ident. Valor = Identification of value
Ref. lista = Reference on listing
Concepto tributario = Concept of taxation
Zona = Area
Num. Recibo = Receipt number
D.N.I. o C.I.F. = Identification number of taxpayer
Objeto Tributario = Tax object
Periodo = Interval of taxation
Año = Tax year
F. Alta = Year of fiscal registration
Referencia catastral = Catastral reference number
Nat. Bien = Class of property
V. Catastral = Catastral value
B. Imponible = Rateable value
Tipo = Tax rate
Cuota = Gross taxes
Bonificación = Deductions
Deuda = Net taxes
Rev. Valores = Year of last revision of value
Sujeto Pasivo = Taxpayer
Domiciliación Bancaria = Direct debit
Sello y Fecha = Stamp and date
Total a Pagar = Total amount to be paid
Periodo de Cobro = Payment period
Referencia = Reference

How does your property become liable for tax?

As from 1 January 1995, whenever you purchase a home, you are obliged to apply for the property to be registered. The official application form is known as Modelo 902 and you can obtain it from your local tax office. The buyer of a property is the person obliged to declare the property for registration. However, in the majority of cases it will be the promotor of a block of apartments or a group of houses who submit this application. When you pay the IBI on your property for the first time, you will be billed by mail and the following years it shall be possible to have it done by direct debit through your bank.

How to register your property

For all foreign owners outside the province of Alicante: Be aware that SUMA is the provincial agency for collecting municipal taxes in that province. In other provinces, there may be two alternatives: that similar provincial agencies exist under other names, or that the municipalities themselves collect the taxes.



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