Where taxpayers get caught out
Owners abroad who change bank accounts or never set up direct debit often fall behind with IBI without knowing. Arrears carry surcharges and, eventually, an embargo on the property or bank accounts.
What the bill shows
| Item on the bill | Why it matters |
|---|---|
| Cadastral reference | Identifies the property in deeds and returns |
| Cadastral value (land + building) | Base for IBI, imputed income, wealth tax and plusvalía |
| Year of last valuation | Decides whether 1.1% or 2% applies to imputed income |
| Tax rate | Set by the town hall |
Buying mid-year
The owner on 1 January is legally liable for the whole year. In practice, buyers and sellers usually split it in proportion to the days each owned the property, and the amount is agreed at completion.
Paying from abroad
Most town halls in the islands collect through a tax agency that offers direct debit from a Spanish bank account. Payment calendars vary by municipality. Owners abroad can appoint a tax representative to receive notices.
Waste collection and other local charges
Many municipalities send a separate bill for waste collection. Both are deductible from rental income for EU/EEA non-residents.
Checking the cadastral value
If the cadastral data is wrong, for example a built area larger than reality, you can ask the Cadastre to correct it. That reduces IBI and the other taxes based on it. See imputed income, plusvalía and our property tax service.
An illustrative example
Based on situations we commonly see; not a specific client. A Dutch owner in Menorca had a cadastral record that still included an old pool house demolished years ago. We applied to the Cadastre to correct the built area, which lowered both her IBI and her imputed income tax from the following year.
How Castell.tax can help
We handle the taxes of buying, owning, renting and selling property in Mallorca, Ibiza, Menorca and Formentera: purchase taxes, IBI and the cadastre, rental returns, plusvalía and capital gains. We coordinate with your lawyer and notary so the figures are right before you sign. See our property tax service or contact us in English or German.
This page is published by Castell.tax, the tax practice of Castell.law in Palma de Mallorca. It is general information; tax rules and rates change, so check your case with us before filing.
Not sure what you owe? Ask before the deadline
Send us your situation or the letter you received. A tax adviser will tell you what applies, what it could cost and what to file.
Frequently asked questions
Who pays IBI if I bought in June?
The owner on 1 January is liable, but the parties usually split it by days.
Is IBI based on the market value?
No, on the cadastral value, which is usually lower.
Can non-residents pay by direct debit?
Yes, with a Spanish bank account.
What if IBI is unpaid?
Surcharges apply and the town hall can embargo the property.