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IBI – stands for El Impuesto sobre Bienes Inmuebles and freely translated is a municipal property tax. The IBI tax is based on the property’s taxable value which is called Valor Catastral. The municipalities have access to Valor Catastral and thus this does not need be declared yearly.
It is common for the law firm that assists with the home purchase to help put the IBI bill on direct debit, while at the same time changing agreements on electricity, gas and water.
Then the tax is deducted from your account and you get a receipt once a year or several times a year from the municipality. How often the tax is collected depends on the municipality. Some municipalities do not send out receipts of the payment but you can get basic informatio on the payment from your bank.
You will in most municipalities receive your “Recibo de IBI/carta de pago” once a year to your Spanish address and you should have one among your documents from when you bought the property.
If you do not find the receipt, you can ask for it from the municipality and we can of course assist.
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Modelo 210 refers to taxation for non-residents in Spain and is a government declaration of income. You can often compare this to a “state property tax” if you do not rent out your home as it is based on the value of the property.
In fact, this is an income tax return and even if you do not think you have income in Spain, the state considers that owning a vacation home is an “income benefit” that should be taxed. The tax itself is based on the taxable value of the property, Valor Catastral.
The form also offers the opportunity to raise other types of income, such as from rental or other types of income in Spain.
IBI, which is the municipal property tax, applies to all properties, regardless of whether the owner is foreign or Spanish and must be paid in the same way.
While IBI is based solely on taxable value of the property (valor catastral) and thus can be calculated directly by the municipality, the state income taxes need to be declared with Modelo 210. The difference is that in your state tax there may be other types of income which means that your tax does not always correspond to a percentage of your property’s taxable value.
For example, you can rent your home part of the year and thus do not pay flat-rate tax for the whole year, only for the part you do not rent out. At the same time you need to declare rental income for the days you rent out. The tax is therefore not the same every year and thus needs to be declared by you in order for the state to know which tax is to be paid.
If you do not find your IBI receipt then you can request a new one from the municipality or “Patronato”. This can be somewhat complicated if you are not in Spain. The taxable value, valor catastral is “protected”, which means that a person who is not the owner of the home or has a power of attorney cannot obtain the information. A power of attorney in itself often needs to be registered with a notary, which in itself is a complicated process.
One of the ways is to ask if the law firm that helped with the house purchase has a copy of your receipt, sometimes they save a copy of your purchase documents. Some real estate agents also save this information and may be an alternative.
If you have a bank receipt on your latest payment, it can help us get the information for you.
It may also be that the municipality do not send an invoice (the municipality has no obligation to do this while you have an obligation to pay). In smaller municipalities, property registries have not always been in order, which means that the municipality simply does not know which properties are in the municipality and which will pay the tax.
In these cases, the municipalities do not send an IBI payment receipt to the properties as they do not have in their registers who has to pay. However, these registers have been updated in many municipalities in recent years and the municipalities have started sending out IBI bills to most homeowners.
The IBI tax is normally between 0.4 and 1.3% of the property’s total taxable value, valor catastral total. Your taxable value is usually much lower than the fair value paid for the home.
This varies slightly between municipalities.
In some municipalities, IBI is paid at the beginning of the year, in others towards the end of the year, In some cases the payment is made in a lump sum, while in some it can be divided into more payments. In some smaller municipalities, the date of payment may be set BEFORE the municipality sent out the IBI invoice. This makes it difficult to pay the tax on time, in which case the municipality is usually not very strict in terms of time. The important thing is that the tax is paid.
Are uncertain about when payment is being made or if you have paid IBI? Feel free to ask at your local municipality and start by looking at your bank account statement with your Spanish bank to see if a payment has been made.
It may be that your law firm did not include a set of auto-giro deductions from IBI in their work when you bought the home or that they missed something which means that IBI has not been paid.
If you have failed to pay once or for a longer period, it is good to sort out the question with the municipality and make a payment for the periods you missed. If you discover a miss yourself and state this relatively quickly, there is an opportunity to get reduced tax surcharges. Please contact us for more information if this is the case.
The municipality can act on its own and in some cases withdraw the money from your Spanish account. In extreme cases they can prohibit the use of the housing until the tax debt is settled.
You should pay the tax at least four years back in time if you have missed. It is also important to keep track of when / who pays IBI in connection with property purchases / sales.
The IBI receipt is a document containing important information needed in connection with the payment of the state property tax. This includes property designation, Referencia Catastral, the property’s valuation value, Valor Catastral and to confirm that address information is correct.
This data is needed to calculate the state property tax and for being able to fill in Modelo 210 correctly. The information is also used to calculate deductions that you are entitled to if you rent out your home.
If you have this information available you will not need to find your IBI-receipt. You can declare Modelo 210 without the IBI document if you know your Valor Catastral.