IBI - local property taxes in Ibiza

When you own a property in Ibiza, 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.

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

When you buy a property in Spain, you have an obligation to register it for tax purposes. (Please do not confuse this with the registration for legal purposes in the Property Register). This obligation became effective 1 January 1995. The registration can be done in the town hall or in the tax collecting offices. The application for registration will be sent to the Cataster Office (meaning the "Catastro" office you will find in each of the provincial capitals), since they are the ones responsible for making the registration and the assessment on the value of the property, that will later appear in your bill for local rates (IBI).

First of all, find out if the promoter you bought from has already made the registration. If he has, you need not do anything; just wait for a letter from the 'Catastro' giving the tax value, if this value has not already been given by the promoter. Be aware that it can take years before the "Catastro" makes the assesment.

If the property that you have bought has not been registered for tax purposes, or if you have built a house on a registered plot, or if you have made additions/extensions to a registered building, the documents that should be submitted when applying for a property to be registered are the following:

• A 20 x 15 cm photograph of the front of the building.

• A plan showing the situation of the property (you can get such a plan in the town hall).

• Plan of the building plot.

• Plans of each floor of the house.

• 'Certificado de fin de obra (Certificate of termination of the work) from the architect and the "Cedula de Habitabilidad" (Habitation Certificate).

On the application form will be some space for technical information on the dwelling.

If property is already registered

If you buy a second-hand property and the previous owner can give you receipts for the local rates (IBI), you know that the property has already been registered. Your obligation then is to declare yourself as the new owner. This is done in the town halls or the SUMA offices, which will then send the application on to the "Catastro" for registration.

You will be asked to produce:

• Photocopies of your title deed (escrituras).

• The last receipt for local rates (IBI) for the property.

You will be given a copy of the application that you fill in and sign. The change in name will not appear on the tax bill before the next tax period.

Do remember that the law establishes certain time limits for this registration. For changes in ownership of a property, the time limit is two (2) months after signing the escritura. For registration of new buildings or renovations, it is also two (2) months from signing the "escritura de obra nueva" (deed for the building).

There are now fines for not complying with the obligations mentioned above, ranging from 6 to 900 Euro.

Voluntary payment period

The voluntary period for payment of IBI and other local taxes can vary in each municipality. You find out the dates in your local tax collection office.

If you have arranged for your bank to direct debit these payments, you just wait for the receipt from the bank. If you have not made such an arrangement, you will get a bill for the taxes to be paid and must then go to one of the banks mentioned on the reverse side of the bill to pay. Or you can pay by way of one of the Cajeros Automaticos if you have such a card, just entering the reference number in the upper part of the bill with 13 digits. Or you can pay directly in your local tax collection office with certain credit cards.

Payments made after the voluntary period will be surcharged at the rate of 20%, plus interest on the delay.