What Is IBI?
IBI stands for Impuesto sobre Bienes Inmuebles. It is Spain's annual property tax, similar to council tax in the UK or property tax in the US. Every property owner in Spain pays IBI, regardless of whether they are resident or non-resident, Spanish or foreign.
IBI is a municipal tax. Your local town hall (ayuntamiento) sets the rate and collects the payment. This means the amount varies significantly depending on where your property is located.
How Is IBI Calculated?
The IBI calculation is straightforward:
IBI = Valor Catastral x Tax Rate
The valor catastral (cadastral value) is an administrative valuation assigned by the Catastro. It is typically much lower than the market value, often 30% to 50% of what the property would sell for. The tax rate is set by each municipality, usually between 0.4% and 1.1% for urban properties.
Example Calculation
- Market value of apartment in Marbella: EUR 350,000
- Cadastral value: EUR 140,000 (40% of market value)
- IBI tax rate in Marbella: approximately 0.72%
- Annual IBI: EUR 1,008
IBI Rates in Popular Costa del Sol Municipalities
- Malaga city: 0.59% urban
- Marbella: 0.72% urban
- Estepona: 0.64% urban
- Fuengirola: 0.83% urban
- Mijas: 0.73% urban
- Benalmadena: 0.78% urban
When and How to Pay IBI
IBI is paid once a year. The payment period varies by municipality but typically falls between August and November. Most town halls offer a discount of 3% to 5% for setting up a direct debit (domiciliacion). Some municipalities allow payment in instalments.
You can pay at the town hall, at designated banks, or online through the municipality's website. If you do not pay on time, surcharges and interest apply. Persistent non-payment can lead to a charge (embargo) on your property.
IBI When Buying or Selling
Spanish law says the person who owns the property on January 1st pays the full year's IBI. In practice, buyer and seller often agree to split the IBI proportionally based on the completion date. Your lawyer should negotiate this in the purchase contract.
Before buying, always ask your lawyer to check that IBI payments are up to date. Unpaid IBI can become a charge on the property, and the new owner could end up liable for the previous owner's debt.
Can the Cadastral Value Change?
Yes. Municipalities periodically reassess cadastral values, sometimes dramatically. A cadastral revision can double or triple your IBI overnight. The last major revision in many Costa del Sol towns happened in 2015 to 2020. You can appeal a new cadastral value within one month of notification.
Budget for Annual Ownership Costs
IBI is just one of several annual costs of owning property in Spain. Non-residents also pay income tax on imputed rental income, community fees, and possibly wealth tax. Use our free calculator to estimate your total costs, both at purchase and annually, so you can plan your budget accurately.