IBI (Impuesto sobre Bienes Inmuebles)

Annual municipal tax on property ownership. It is paid by whoever owns the property on 1 January — even if you sell in February, the whole year's bill is yours, although the Supreme Court allows the sale contract to apportion it by each party's days of ownership, and it is common practice. It is calculated by applying the rate set by each town hall (between 0.4% and 1.1% for urban property) to the cadastral value, so it varies greatly between municipalities. It is usually charged between August and October and is worth paying by direct debit, as many municipalities offer discounts for it. When buying, ask for the latest receipts: IBI debts from the previous four years follow the property, not the former owner, and the new owner answers for them with the home.