It is that time of the year again and in most areas the local tax known as IBI and or SUMA is now up for payment!!!

IBI

IBI stands for Impuesto sobre Bienes Inmuebles urbana/rustica and is due for payment by all owners of a property in Spain regardless if it is your permanent residence or a holiday home, even if the property stands “empty” you are still obliged to pay this tax!

IBI is a local tax payable to the town hall that your property is registered to.

In most areas this bill is issued for payment at the end of July and gives all owners the opportunity to pay it before the (normally) beginning of October, this differs from area to area and it is important to know the period applicable to you.

This bill might be known to you as the Suma bill but please note that Suma is a debt collector contracted mostly by the town halls in the Valencia region. If you are an owner of a property in, IE: the Murcia region you will find that the IBI is issued and the bill sent to you by the town hall.

Not paid an IBI bill yet?

When a house is purchased your representative at the time are normally the one that carries out the process of changing the ownership of the property into your name. Normally at the same time a standing order is set up so that the bill goes through your bank account every year. This gives you the peace of mind that it is paid, you only have to think of having sufficient funds in your bank account.

If the balance in your account is short of only 1 cent the bill will be returned unpaid and penalty fees plus interest will apply when you eventually get to pay it. Many years of ignoring the paying of this bill could result in embargos of your bank account or even on your property.

If you have purchased a new property the same applies here when it comes to your representative at the time notifying the change of ownership. The local town halls are slowly catching up and the bill is normally issued only a short time after you taking over the completed property. During the boom days this could take years and now in some areas it is only taking months.

As a purchaser of a resale or a new property, please remember that it is your obligation to make sure that the IBI has been paid and that you are in possession of the corresponding receipt for that year.

Cadastral value

On the IBI you find something called the “valor catastral” which is the rate-able value of your property. This value is around 70% of the market value of the property. Now it might not even be that due to the economical crisis which Spain is now coming out of. Town halls review this value on a fairly regular basis as an increase will give the corresponding town hall more revenue.

The “referencia catastral” is important for your fiscal representative as the value is used to calculate your non-resident tax, ALWAYS keep the bill safe.

When you decide to sell this value is needed in order to calculate the lowest amount that the authorities will accept as your selling price. During the crisis this amount has turned out, in many cases, to be higher than the true selling price and many owners have received a complementary additional tax bill, there are ways to appeal against this tax bill.

Do you have any questions regarding IBI and SUMA? contact us now.