Property tax in Spain – cities with the highest and lowest rates of IBI tax

Santander has the lowest IBI rate of all the provincial capitals under the common system and Lleida – the highest. This is shown by the scale of IBI rates for 2022 between those that maintain this year's rates and those that have so far announced that they are lowering them, as in the case of Madrid, now the third with the lowest IBI. Santander and Zaragoza are the two with the lowest rates, and are further reducing them, while Cáceres and Soria are raising them.

These increases and decreases will have a direct effect on the quota, as none of these municipalities will update their value assessments next year, which could lead to a decrease in the rate but an increase in the base. The municipalities can also ask the Treasury until May to apply the coefficients of the 2022 Budget to increase the tax.

In the scale of provincial capitals of common territory in 2022, those with the lowest rates, Santander and Zaragoza, increase their leadership and Madrid is placed in third position with the new reduction that has been announced, the third in a row. In this way, the Cantabrian capital reduces its rate from 0.41000 to 0.40000, which is the legal minimum, and extends from 35% to 50% the allowances for large families.

In turn, the Zaragoza rate went from 0.4123 to 0.4087, which will compensate for the upward revision of cadastral values in 2013 (that doubled them). This way Zaragosa is getting closer to the legal minimum (0.4), which the municipal government promised to reach before the end of 2023.

Madrid will reduce IBI by 60 million euros, with a reduction in the rate from 0.456% to 0.418%, which will affect 2.2 million receipts, of which 1.5 million are homes and 96,299 – commercial premises, and will maintain the bonuses of 2020, as announced on 21 October by the city council.

The ranking of the lowest rates is completely altered with the four provincial capitals, which have by far the lowest rates and which would head the list in the order of San Sebastian, Bilbao, Vitoria and Pamplona.

On the side of the highest rates of IBI are three of the Catalan capitals: Lleida (0.967%), Tarragona (0.953%) and Girona (0.932), followed by Melilla (0.800), Ciudad Real and Ceuta (both with 0.790). Barcelona is among the capitals with high rates, but with a lower percentage, 0.660. However, in the case of Barcelona, it should be noted that it has very high cadastral values, revised in 2017. Another very practical scale is that offered by the Organisation of Consumers and Users (OCU), as it measures what is paid in each capital city on a specific cadastral value of 80,000 euros, which results in San Sebastian being among the lowest, where 147 euros will be paid in 2021, 153 in Bilbao, 258 in Vitoria, 314 in Pamplona, 328 in Santander, 330 in Zaragoza and 355 in Toledo and Teruel. On the high side, in Lleida citizens will pay 774 euros this year, followed by Tarragona (762 euros), Girona (746), Melilla and Ciudad Real (640) and Ceuta (632).

Thus, the difference between the territory with the highest IBI (Lleida) and the lowest (San Sebastian) exceeds 625 euros. The OCU warns of the "enormous differences" between provinces, which in its opinion increase fiscal inequalities. These differences also apply to tax allowances. For example, in the subsidy for social housing, the law provides for a three-year reduction of 50% of the IBI. However, capitals such as Barcelona and Salamanca allow for seven more years.

The bonus for large families is a reduction of up to 90% of the tax bill in most cities, but sometimes the percentage is lower or does not even exist. In turn, direct debit rebates in some cities mean a reduction of up to 5% of the bill, such as in Cuenca, Granada, Guadalajara and Seville, but in other provincial capitals they do not exist. Local councils received 12,845 million euros from IBI in 2020, compared to 13,893 million the previous year, which is their main source of funding, followed by the municipal capital gains tax now annulled by the Constitutional Court, which brings in some 2,500 million a year. The Treasury is preparing a replacement for the tax, while it is finalising a rise in the taxation of real estate with the reference values in Patrimonio, Sucesiones and ITP.

The provincial capitals lead the tops of the lowest IBI rates, with San Sebastian in 1st place (0.18395), followed by Bilbao (0.1913), Vitoria (0.323) and Pamplona (0.3923). These rates are below the legal limit for the common system, given that article 72 of Royal Legislative Decree 2/2004 establishes that the minimum tax rate will be 0.4% and the maximum 1.10% in the case of urban real estate, compared with rates of 0.967. These differences are due to the fact that the Basque Country and Navarre can maintain, establish and regulate their own tax system, which means that they are in charge of the management, settlement, collection and inspection of taxes and often have low rates due to the sufficiency of financing.

In this way, San Sebastian, one of the most expensive capitals for the purchase of a home, ranks first in Spain with the lowest IBI. According to the OCU scale, which measures what is paid in each capital city on a cadastral value of 80,000 euros, in San Sebastian 147 euros will be paid in 2021, 625 less than in Lleida, 153 in Bilbao, 258 in Vitoria and 314 in Pamplona.

Property tax in Spain