All property owners in Spain have to pay local taxes – Impuesto de bienes inmueble – IBI – to their local Town Hall. These taxes or local rates are revised from time to time. They are based on the catastral or rateable value which is fixed by each Town Hall. The central government uses these values when providing public funds and setting tax levels. In some areas there has not been a revision for more than 15 years although technically each Town Hall should revise them at least every 10 years.
The good news is that in areas where the values were revised upwards during the last property boom a reduction is now being made. For example the last revision in Benalmadena was in 2006 and this is being reduced by 4%. Marbella is reducing their catastral values by a substantial 9% even though the last revision came after the last financial crisis.
At the same time some Town Halls have increased the values however. For example Nerja sees a 3% rise taking into consideration the last valuation was in 2003. Also Benahavis sees a rise of 5% which is not surprising as the last revision was as long ago as 1996! In all 26 areas have reduced the values this year.
The importance of this for property owners is that these values are used when calculating the fiscal or tax values of properties and therefore affect Income Tax, Wealth tax and Succession and Inheritance taxes. Contact us if you need to know more about your tax obligations in Spain. Call on 952 931781 or email at [email protected]