The Property Tax (IBI) is a fundamental aspect of all real estate purchase and sale transactions in Spain. Knowing exactly who is responsible for this tax can avoid conflicts and unexpected costs during the property transfer process.
Who Must Pay the IBI?
- The IBI is an annual municipal tax.
- According to current regulations, the registered owner as of January 1st is the taxpayer of the IBI for that year.
- If the sale occurs during the year, the city council will require payment from the registered owner at the beginning of the year, regardless of subsequent transfers.
Agreements between the Parties
- It is common for the buyer and seller to agree on a proportional distribution of the IBI based on the length of time each party has owned the property during the year.
- This distribution must be clearly and expressly reflected in the purchase and sale contract.
- Important: The city council does not recognize these private agreements. Any compensation must be arranged directly between the parties.
Legal Basis
- Law Regulating Local Taxes, Article 63: establishes that the taxpayer for property tax is the owner as of January 1.
- Supreme Court case law supports the validity of private agreements provided they are duly recorded in the contract.
Practical Recommendations
- Negotiate and document in writing any agreement regarding the distribution of property tax.
- Consult with a notary or tax advisor to ensure that the agreement complies with the regulations and is correctly reflected.
- Review local regulations, as there may be specificities depending on the corresponding municipality.
Summary
- The annual property tax is due to the owner as of January 1, although the parties may agree on a different distribution.
- The municipality will always claim payment from the registered owner on that date.
- Clear negotiation and professional advice are key to avoiding conflicts or unforeseen expenses in the purchase and sale transaction.