The electoral campaign for the municipal elections last Sunday focused on the candidates who promised to reduce the effective rate of the property tax (IBI) in their localities. A priori, these proposals for fiscal relaxation would be risky for the accounts of the consistories, since the IBI is the tax figure that more than sustains most of their income. However, the municipalities have high resources guaranteed even if they lower the rates, so they can afford these promises without running great risks. Without going any further, in 2022 the income from this tax doubled that registered in the years prior to the financial crisis.
Spanish towns collected last year more than 13,170 million euros thanks to the urban IBI. If this amount is added to the 480 million related to the rustic IBI and the 550 million of the tax on real estate with special characteristics (BICE), the total collection exceeded 14,000 million, a maximum in the series updated yesterday by the General Directorate of the Cadastre under the Ministry of Finance.
All these figures, detail sources familiar with the sector, are explained not so much by an increase in direct taxation -that is, in effective rates-, but by the consolidated increase in tax bases, which are the value of real estate .
The final IBI invoice, that is, the liquid fee, is the result of applying the tax rate corresponding to the taxable base in question. This, in turn, is obtained after applying the reductions or exemptions allowed in each case to the cadastral value of the home. That is to say, while the cadastral revisions continue to increase the values, the consistories can lower the rates without drastically reducing their income.
In Spain, Royal Legislative Decree 2/2004 establishes that the minimum tax rate of the IBI will be 0.4%, reaching the maximum up to 1.1%, always in the case of urban real estate. Local governments, therefore, have a relatively wide margin to establish one type of tax or another, as well as the different exemptions and bonuses applied.
The city of Madrid, for example, has in force since 2023 the municipal rate at the minimum allowed. The framework program for the 28M of the PP, the great winner of the elections, proposes a “progressive reduction of the real estate tax”, at the same time that it promises to promote “the application of environmental bonuses for those properties in which that charging points for electric vehicles or systems for the use of solar energy and energy efficiency actions have been installed, ”adds the document.
The reality shown by the official data from the Cadastre reflects that the municipalities throughout Spain have been increasing IBI income year after year despite the tax reductions that have been seen in several of them. The more than 13,000 million euros registered in 2022 in the urban IBI, in fact, multiply by two the 6,500 million that were collected in the years of the peak of the real estate boom, when housing prices were notably higher than the average with the one that closed last year. According to data from the General Council of Notaries, the price per square meter of houses closed in Spain at 1,615 euros in 2022, compared to 1,790 euros in 2007. From Tinsa, for their part, they recall that the price of housing accumulates a fall of 20% from the maximum values reached 15 years ago.
According to data from the Cadastre, the municipalities of the province of Madrid were the ones that obtained the most income from this tax, exceeding 2,500 million euros as a whole. Taking into account that some 4.5 million receipts were registered, the average payment amounted to 564 euros. In places like the capital itself, the figure is explained by the average cadastral value of the homes, one of the highest in the country. This was followed by the average payment of 514 euros in the province of Barcelona, with combined revenues exceeding 2,000 million. The podium was completed by Girona, with 431 euros, followed by the Balearic Islands and Malaga (429 and 417 euros).
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