Understanding Spanish Property, Taxes, Documents and Law. IBI Tax and Catastro explained for normal people. Being a Property owner in Spain implies that you must pay taxes, just like you would in any other country. In Spain residents and non-residents must pay a tax known as the Impuesto sobre Bienes Inmuebles or IBI apart from the Inputted income Tax and/or Rental Tax. In this brief article we are going to explain what IBI is. What is the IBI? IBI is a Council tax that all Property owners in Spain have to pay and this tax is used by the local Town Halls to pay for all those infrastructures we use on a daily basis. So when you are sitting on a park bench or using that new cycle lane the Town Hall has invested in, you know where the money came from. How does the IBI get calculated? To calculate the amount of IBI and imputed income tax to pay the value known as the VALOR CATASTRAL is used. So if IBI is calculated using the Valor Catastral (Catastral Value). How is the Valor Catastral Calculated? The Valor Catastral reflects the value or proportional part of the value of the land the property is located in (apartments and flats also have a proportional part of land) and also takes into account  the value of the building itself including construction costs, improvements, location, size, condition, etcetera. This Valor Catastral can never be higher than the Market Value of the Property, fact is that it is usually much lower than the Market or Sales Value of the Property. This value is registered in the Oficina Catastral or Catastro whose office is found usually inside or close to the Town Hall but you can also get Catastro details Online. Note that the Catastro Office is not the Land Registry Office, they are two different entities, and this can lead to some confusion. To easiest way to know the Catastral value of your property is to look at your IBI receipt, you’ll find it on the top part close to the fields that correspond to the receipt number. Revisions and changes in Valor Catastral. Every 10 years this value gets revised and renewed on a local area basis, sometimes though, some properties and areas have not had their Catastral Value revised every 10 years. If you have made changes to your property the valor Catastral should be revised too. In case you decide to do some building work and not ask for licenses, something that is very common in this area, be aware that what Town Halls are now using drones to take photographs of properties and then using human sight or software to detect changes to the property. In case changes are detected you will get a fine and probably be made to pay not only the difference in this year’s IBI but the difference four years back plus a little fine. IBI and Catastral Value implications when selling a Property.   IBI payments have to be up-to-date to be able to sell the property. If the IBI bill has not been issued before the day you officially sell the property then the person that pays the IBI bill has to be the person that was the owner of the property on the 1st of January of that same year. So if a house is sold on the 2nd of February the previous Property owner would be legally obliged to pay that year’s IBI tax. Also care must be taken, the Catastral registry data and description should match the Land registry data and description. It is your Real Estate Agent’s obligation to check this and inform you when selling the house. If there are differences, and it’s not uncommon at all to find differences, you could easily run into problems when in the Notary and the Property will not sell until this is solved by the Property Owner. That is one of the reasons you should opt-out of Estate agents that are just holding keys for houses and choose an Estate Agent that understands The Spanish Property Laws and Obligations fully. At Arrando we are registered Spanish API agents that do our best to inform and keep our clients informed of all these things and much more. We are friendly, speak English and Spanish and are completely obsessed with helping out clients whatever their property needs may be.

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