Understanding Local Taxes - IBI in Spain

We have recently been asked so frequently to explain what IBI and catastral value means that we thought that we thought that it would be a good idea to set the whole thing out for the readers of the Inland Trader in clear terms.

The amount of IBI that you pay every year is determined by the catastral value of you property. The catastral value is determined objectively for every property from the building information in the Catastral Registry and will be the total of the catastral value of the grounds and the catastral value of the built property.

In order to determine the catastral value the following criteria is taken into account:

a) The location of the property, the urbanistic circumstances (designation) of the grounds and its suitability for the production;

b) The cost of the construction materials, the fees of the contractors and professionals and other construction costs, the use, quality and age of the building, including the historic or artistic character or other characteristics of the buildings;

c) The production charges and fees of the promotion company, or factors which correspond to supuestos de inexistencia of said promotion;

d) The circumstances and market values;

e) Any other relevant factor determined in accordance with the law.

The catastral value of the property cannot exceed the market value, understanding that as being the most probable price for which it could be sold, between independent parties, a property free from charges, whose effect is fixed, by order of the Ministro de Hacienda, the tax office, a market reference rate for properties of the same class. In the case of property with the sale price limited administratively, the catastral value cannot exceed that value under any circumstances.

In accordance with regulations comprehensive technical rules are established in the concept of, rules and the remaining factors which, in accordance with the criteria previously set out and in function of the intrinsic and extrinsic characteristics which affect the property, may be allowed to determine the catastral value.

The catastral value of urban and rustic property is determined through a process called procedimiento de valoración colectiva (proceeding of collective evaluation), notwithstanding that it may also be determined individually in those cases in which it is necessary and the incorporation of the buildings in the Catastral Register is produced in virtue of the proceedings of declaration, communication, requesting and correcting erros, or catastral inspection.

These collective evaluation proceedings present a distinct scope of function of the type of modification of the account of the value that is needed.  In this way, they have a general character when the approval of an account of total value is required; partial, when the approval of a partial account of values is required; and simplified, when they do not demand the approval of any account.

The determination of said catastral value as part of what is called the account of values which, within the municipal scope, considers the modules and information relevent to the effects to proceed to fix the value of every property of the zone, undergoing a general revision every ten years taking into account the changes which may occur in market and urbanistic circumstances.

The accounts are publicised in the official buletin of the corresponding province, aquiring the consideration of recurribles in an economic-administrative route.  From these the value remains fixed for each property, which should individually notify the interested parties, with one years notice that they are going to take effect, taking effect from 1 January of the following year from when the notification was produced, and allowing one to appeal said individual value in replacement or through an economic-administrative process, without the interposición of the reclamation suspended from execution.

The taxes are charged periodically by invoice, once notified the settlement corresponding to the registration in the respective register, padrón or matrícula, they may collectively notify the successive liquidations by edicts which warn like that.

With the limits of this ten yearly general revision of character and of the special cases that, in this case, come, it is advisable to have present the Ley de Presuppuestos of every year which can update the catastral value through an application of isolated coefficients for each type of property, without requiring the practise of notifying any individualised.  And equally it can be fixed, with aditional character, other coefficients of actualisation by municipal groups determined in function of the dynamic of the estate agent and applicable on the catastral values brought up to date from the first.

In the proceedings of collective evaluation, the determination of the liquidable base is the competence of the Dirección General del Catastro, being appealable before the
Economic-Administrative Court
.  However, if the determination of the taxable base resulting from the proceedings of declaration, communication, request, rectification of discrepencies and catastral inspection, it will be the Town Hall who can determine it.

The assumed application for the reduction is planned on the following urban and rustic property.  In the first place, that property whose catastral value is increased by proceedings of collective evaluation of general character in virtue of the application of the first total value account approved with posterity to 1 January 1997, or in successive total accounts approved once the period of reduction of 9 years has passed it is established in effect. 

To arrange an appointment Poveda Hayes please contact our offices by email to This email address is being protected from spambots. You need JavaScript enabled to view it.">This email address is being protected from spambots. You need JavaScript enabled to view it. or by telephone on 96.353.0196. See www.povedahayes.com for further details.

Javea Office Address:    Avda del Plá, 126 - 1.20, 03730, Jávea (Alicante).

Valencia Office Address:           Avda. Barón de Carcer, 31 -3º 6ª, 46001, Valencia.

© Poveda Hayes Abogados & Solicitors September 2008

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