IBI and Utilities
Once You Become a Property Owner in Spain: What Should You Know About Utilities and Local Taxes?
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​When you become the owner of a property in Spain, you will also take on certain responsibilities related to the maintenance and management of the property. Among them, it is essential to consider the payment of utilities (water, electricity, gas, etc.) and local taxes, such as the Property Tax (IBI) and the Waste Collection Fee.
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What Are the IBI and the Waste Collection Fee?
- IBI (Property Tax): This is an annual tax that all property owners must pay to their local Town Hall to help fund essential public services in the community (such as street cleaning, security, sidewalks, parks, etc.). The amount is calculated based on the cadastral value of the property.
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Waste Collection Fee: This fee covers the cost of waste collection and treatment services. Its frequency and amount vary depending on the municipality.
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Both taxes are mandatory and must be paid on time to avoid surcharges or penalties.
Collection is handled directly by the local Town Hall where the property is located, or, in some municipalities, by the public agency SUMA, which manages local tax administration.
Our Firm Can Help You
We understand that handling the transfer of ownership for utilities or local taxes can be complicated—especially if you don't live in Spain or are unfamiliar with the local administrative system. That’s why our firm offers a comprehensive service to assist you with everything once the purchase is completed:
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Transfer of utility contracts into your name.
Management of direct debit setup so that all payments are made automatically from your Spanish bank account.
Processing the ownership change and direct debit setup for local taxes with the corresponding Town Hall.
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Leave it in our hands. We take care of everything so you can enjoy your property in Spain with complete peace of mind from day one.
Frequent asked Questions
1. What documentation is required to change ownership and set up direct debit?​
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ID of the new owner
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Deed of purchase and sale or another notarial document
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Latest utility bill or municipal tax bill
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Bank account details for direct debit
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2. Who pays the property tax (IBI) if the sale is signed halfway through the year?
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Legally, the person who was the owner on January 1st must pay the full year's tax. However, when we assist with the purchase and sale, we include in the deed an agreement to pay proportionally, according to the time each party — seller and buyer — has enjoyed the property that year.
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3. What happens if utilities have been disconnected?
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We take care of reactivating the services. We handle the technical setup (if necessary), provide the property documentation, and manage inspections if required.
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4. What are the advantages of setting up direct debit for municipal taxes and bills
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Since not all municipalities issue bills at the same time of year, direct debit ensures timely payment and helps avoid late penalties.
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5. Are the IBI and Form 210 the same?
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No, IBI and Form 210 are not the same.
IBI (Property Tax) is a municipal tax. It is paid to your local Town Hall. It must be paid by all property owners, regardless of whether they are tax residents in Spain or not. It typically covers all kinds of municipal expenses, such as: streets, sidewalks, public lighting, water supply, sewage, local police, cultural and sports activities, etc.
On the other hand, Form 210 is a state tax managed by the Spanish government. It must be filed with the Tax Agency (Hacienda). Non-residents must file this declaration when they earn income in Spain. Even if they don’t work or do business, they may still need to file it if they own a property in Spain, whether rented to third parties or used personally. One does not replace the other. Both must be filed and paid, if applicable.
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