By WeLex, leading law firm in Marbella has the pleasure to write some lines with regards to the Rates in Spain known as Impuesto sobre Bienes Inmuebles
The Tax on Real Estate (IBI) is a tax framed in the Local Spanish tax system. It management is shared between the State Administration and the Town Councils and the tribute is collected by each Town Hall for the properties on its municipality. It’s been in forced since January 1st, 1990.
The taxpayers subject to this tax in Spain are all individual and legal entities and other entities such as communities of properties, civil societies that hold the ownership of the real estate of rustic or urban nature or the owner of the right which produces the chargeable event.
Rateable Value: It’s objectively determined from the data provided by the Real Estate Registry (catastro), and it’s made up by the rateable value of the land and the building. The valuation criteria needs to take into account established rules such as that the rateable value cannot exceed the market value, being this last one as the most probable price for which a property free of change could be sold between independent parties. Therefore, all Spanish real estate properties of each municipality are included in a census and have an assigned value and identification number.
The Accrual of the tax occurs on the first day of the tax period that coincides with the calendar year.
The management of this Tax consists of two phases:
- Property Management – Management of the Data and documentation.
- Tax Management – Qualification and tax collection.
The calculation and amount due to be paid by each property in Spain will be provided by the Town Hall of the municipally where the property is. The Spanish Town Hall normally informs by way of a letter which is sent to each property approximately a month prior to the payment period. Beware, that the lack of receipt of the letter does not exempt the owner from the responsibility of the payment by its due date and late payments will be sanctioned and interest charged.
The Town Hall in Spain provides you with the alternative to set an annual direct debit (some even offers you a small discount when the direct debit is set), so this Spanish Tax will be charged directly to your bank account, but you must ensure to have enough funds on the account to cover the payment on its due date, as lack of payment of any of the receipt will immediately cancel all future payments and you will need to restore the direct debit and issue the payment before the last payment date to avoid sanctions for late payment.
The date when the rates in Spain are due and number of instalments, if any available, varies from one Town Hall to another, although is usually the months of September, October and November. As already mentioned it is the owners responsibility to be aware when this Tax is due on your municipally.
Welex, accountant in Marbella, accounting in Spain, accountants costa del sol, tax consultants Marbella, tax planning in Marbella