Other taxes

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Property tax (IBI)

The Property Tax (IBI) is also known as the council tax, since it is applied by city councils.

It is very important not to confuse this tax with the taxes on ownership of real estate, such as income tax for non-residents, which must be paid by non-tax residents for properties held in Spain and not rented out, or the personal income tax paid by tax residents under the income attribution rules for properties that are not rented out, with the obvious exception of the taxpayer's main residence.

Who has to pay the IBI?

IBI is paid by the owners of any real estate property or by those who have the right or title to use it (beneficial owner, concessionaires or titleholders).

It is very important not to confuse this tax with the taxes on ownership of real estate, such as income tax for non-residents (IRNR), which must be paid by non-tax residents for properties held in Spain and not rented out, or the personal income tax (IRPF) paid by tax residents under the income attribution rules for properties that are not rented out, with the obvious exception of the taxpayer's main residence. In other words, IBI is paid alongside other taxes, and does not replace them.

What does the IBI tax?

The IBI is based on the cadastral or rateable value of the property, which is set by the Treasury Department through the Property Registry (Catrastre Immobiliari). It is important not to confuse the cadastral value with the reference value of the property.

The rateable value, which is usually lower than the market price of the property, is determined by taking into account various factors, including the size of the construction, the land-use classification, its proximity to public services and infrastructures, etc.

Every so often, the public authorities may update the rateable values.

A tax rate is applied to the rateable value, which may vary significantly according to the municipality concerned.

How often is the IBI paid?

The IBI is an annual tax, although most city councils allow it to be paid in installments during the year (quarterly payments).

Property transfer and stamp duty tax

The Property transfer and stamp duty tax is an indirect tax that is applied in the following three cases:

Taxable property transfer (TPO)
This case taxes the taxable transfer between living people of all types of assets and rights that make up the wealth of natural or legal persons. It also taxes the constitution of some rights (leasing, royalties, loans, etc.).
For example, the transfer of a second-hand dwelling between private individuals would be subject to TPO. New properties (new builds), on the other hand, are subject to Value Added Tax (VAT).
Corporate operations (OS)
As the name suggests, this case taxes corporate operations (constituting companies, capital increase, dissolution of companies, etc.).
Document duties (AJD)
The documents subject to this case include notarial deeds, the first copies of recorded documents and notarial acts when a series of circumstances coincide.

There is a system of incompatibilities between the various tax cases which means that the same act cannot be settled, for example, TPO and AJD may not be applied at the same time.

Value Added Tax

The Impuesto sobre el Valor Añadido (IVA) or VAT is an indirect tax on the general public's consumption of goods or services, regardless of their income.

There are currently three types of VAT:

General VAT, which is applied by default on all goods and services. The tax rate is 21%. For example, if you buy a watch, you pay 21% VAT.
Reduced VAT, with a rate of 10%. Reduced VAT is generally applied to food products, the hotel trade, catering, buying homes, etc. For example, if you stay in a hotel, you pay 10% VAT.
Super-reduced VAT, with a rate of 4%, is applied to basic commodities (medicines, bread, vegetables, milk, etc.). In addition, in order to address situations of social and economic vulnerability, certain consumption (such as oil) and the supply of electricity, natural gas and natural fuels are currently taxed at 5%.

However, there are some goods and services that are exempt from this tax, such as insurance, financial products and teaching in public and private centers.

VAT is paid by the end consumer. Companies act as tax collectors and pay the money to the Tax Office.

Consumers who are NOT resident in Spain or the EU can apply for a refund of the VAT paid on goods to be used/consumed by them outside the country (Tax-Free Shopping Service).

Vehicle tax

Owners of vehicles suitable for traveling on public roads must pay an annual tax on mechanically powered vehicles (IVTM, which stands for Impost sobre vehicles de tracció mecànica), commonly known as the road or vehicle tax.

The owners of registered vehicles must pay the IVTM every year, and the amount paid depends on the type of vehicle and its power.

This tax is managed by the local authority in the municipality where the vehicle is registered.

Registrations are managed by the Directorate-General for Traffic.

You can consult the formalities for registering vehicles and exchanging driver's licenses.

For further information

Finally, please remember that all the information contained in this document applies to natural persons (individuals), because legal persons (companies) pay tax under their own taxation rules. Therefore, if you want to set up a new company in Barcelona or, for example, establish a branch of a foreign company, we advise you to consult the relevant information with specialists.

Consult the various Public Tax Offices concerned: