Property Tax Assessment and Management in Spain
Tax Base and Rate
The tax base is determined by the assessed value of the property, which cannot exceed the market value. The Directorate General for Cadastre of the Ministry of Economy and Finance is responsible for this determination. The assessed value includes both the land value and the value of any construction.
The tax rate is defined by each municipality within limits set by the legislature. The minimum rate is 0.4%, and the maximum is 1.10%. If the municipal council does not set a rate, the minimum rate applies.
Circumstances that may increase the rate include:
- Presence of surface public transport service.
- Provision of more services than are mandatorily required by the basic law on local government.
- Being the provincial capital and also the capital of an autonomous community.
Reduction of the Tax Base
Articles 67 to 70 regulate tax base reductions. Following a collective general assessment procedure that results in an increased assessed value, the City is entitled to apply a reduction coefficient for nine years. This coefficient ranges from 0.9 to 0.1, decreasing over time, and is applied to the difference between the new and old assessed values. In these cases, the tax base is equal to the taxable income less the reduction.
Tax Management and Administration
Traditionally, a distinction is made between land administration, managed by the State Administration through the real estate cadastre, and tax management, which is handled by the municipalities.
The IBI (Impuesto sobre Bienes Inmuebles) management method involves recording, registering, and charging for delivery. Initial settlements are reported, and in subsequent years, collective notifications can be made through edicts.
Taxpayers have a duty to register with the tax authorities by filing a declaration.
Procedures for Incorporation and Valuation in the Cadastre:
- Procedure initiated by statement.
- Correction of discrepancies.
- Cadastral inspection activities.
- Collective assessment procedures.
The valuation document sets out the criteria and parameters for property valuation within the municipal area. Its approval by the Directorate General of Survey requires a report from the Town Hall. Economic-administrative claims can be filed against the valuation document.
The assessed value is obtained by applying the criteria from the valuation document to the specific circumstances of the property.
Cadastral Register
The cadastral register records data on property taxpayers. Each municipality maintains a register for each property, with separate registers for rustic and urban properties. Collection lists are compiled from this register. The state administration is responsible for land administration, and claims against cadastral management can be made to the state’s economic and administrative courts.
Settlement
The authority to settle and collect taxes lies with the municipal councils. Appeals against settlements made by the council can be filed for reinstatement with the council itself.