Property Tax (IBI) in Spain: Understanding the Regulations

Property Tax (IBI) Regulations in Spain

Property Tax (Impuesto sobre Bienes Inmuebles or IBI) regulation is detailed in the Law on Local Finances Recast 2004 and in the Real Estate Cadastre Act, also a consolidated text of 2004.

Taxable Event, Taxpayer, and Accrual

The taxable event is holding an interest in the property. The law distinguishes four rights:

1. Administrative concession on the property: the taxpayer shall be the licensee.
2. Surface rights on the property: the taxpayer will have surface rights.
3. Usufruct right over the property: the taxpayer will be the beneficiary.
4. Property rights over the property: the taxpayer will be the owner.

Each taxable event excludes the others. The excluded are those who are behind in this order.

The law distinguishes between urban real estate, rural real estate, and real estate with special features. The definition of each is given by the rules of the cadastre.

The tax period coincides with the calendar year (January 1 to December 31), and the accrual occurs on the first day of the tax period (January 1).

The taxpayer is the holder of the taxable event. This may be an individual, a legal person, or an entity, such as a community property.

Real Estate

The character of urban or rural property depends on the nature of the soil.

What Soils are Considered Urban for IBI Purposes?

This is regulated in Article 7.2 of the Real Estate Cadastre law. The assumptions that are included are:

1. The ground plan (general urban planning) classified as urban.
2. The developable land on the plan that is included in sectors.
3. The developable land that has approved a development tool.
4. Soil composed of a core population.
5. Land with access road (paved street and sidewalks), water supply, wastewater, and electricity; these are called urban infrastructure services.
6. Land for building consolidated, i.e., having a complete development.
7. Soil equivalent, as well as regional legislation. In Valencia, building land is one in which the integrated action plan foresees.

What is a Property of Special Features?

This is defined in Article 8 of the consolidated text of the Real Estate Cadastre. It is a complex composed of land, buildings, installations, and works which, by their nature, are a linked unit for its operation.

Thus, they are considered a unique property. Individual cases are: electricity production facilities, dams and reservoirs, highways and roads, commercial ports, and airports.