What is IBI?
IBI is Spain's annual municipal property tax — equivalent to UK council tax or US property tax. The town hall collects it (not the central tax agency), and the amount is a percentage of the cadastral value of your property.
IBI (Impuesto sobre Bienes Inmuebles) is a local tax regulated under Royal Legislative Decree 2/2004, the consolidated Local Finance Law (articles 60-77). The owner pays — not the tenant — to the town hall (ayuntamiento) where the property is located. It is one of the main revenue sources for Spanish municipalities.
The tax base is the cadastral value, fixed by the Spanish Cadastre (Dirección General del Catastro). The rate is set by each town hall within the TRLRHL limits: for urban properties, between 0.4% minimum and 1.10% maximum, expandable to 1.30% in provincial capitals with public transport services. That's why IBI varies significantly between Marbella, Pollença, and Barcelona — same property, different rates.
You pay once a year, in a window each town hall sets (typically between May and November). Most accept direct debit with a small discount for enrolment. The bill is always issued to the cadastral owner as of 1 January — if you buy a property in March, the seller was billed for that year's IBI unless agreed otherwise.
For non-resident hosts filing Modelo 210 under the EU/EEA regime, IBI is one of the main deductible expenses: pro-rated by the days the property was actually rented. For non-EU residents, no deduction applies.
Why it matters
If you buy a property to rent out and don't check the IBI before closing, you can get a surprise: a property with €200,000 cadastral value at 1% rate is €2,000 per year that no guest pays directly. It's a fixed cost to the owner, deductible in Modelo 210 if you're EU-resident but equally real either way. Check the IBI bill before buying and before setting your nightly rate.