When the owner of a property is no longer the owner after selling the property, he could still be receiving the invoice for the Property Tax (or IBI) after a certain amount of time. The problem with this is that it is not always clear who should pay for this, or how the amount should be divided after the property has been sold during the year.
For this reason it is not strange that both buyer and seller share the same question: Who pays for the IBI the first year after transferring a property? Today’s article by ShMadrid shines a light on the subject.
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Who should pay for the IBI, previous or current owner?
The Supreme Court answered the question quite clear in its ruling 406/2016 of June 15. The jurisprudential entity decided that whoever is selling the property, must pay the IBI. So if there is no agreement that says otherwise, the seller should take care of the payment.
It is, however, possible to claim a part from the buyer, and this part should then represent the amount of time the new owner has been able to enjoy the property. This is the only way, besides to what the Supreme Court has decided, to settle an agreement on the Property Tax.
It seems only fair and logic that a seller and buyer can agree on the corresponding tax to be paid together, without having to sign an extra document for it. As a result, the IBI will be shared by both parties, in accordance with the specific amount of time that they were the owner of the property during that year.
The ruling of June 15, 2016 states that, when in doubt, the seller will be directly liable for paying the tax. It does, however, provide him with the opportunity to go to court to get compensation for the part of the year he wasn’t owner of the property anymore.
So in the end, the seller can request for the buyer to pay for the corresponding part of the IBI, which will be the number of days that are left in the year, unless they agreed differently.
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If you are planning on buying a property, make sure the specifics of the payment of the IBI are clear before your appointment at the notary. And if you are the seller, do exactly the same. Just be clear on who is going to pay for what, so there won’t be any surprises or questions after signing the deeds and receiving an invoice on your doormat.
To summarise: the Supreme Court has ruled that the seller pays for the IBI, unless an agreement between buyer and seller states otherwise. If the seller is paying for the IBI, he can decide on claiming the days he is no longer property owner from the buyer.
An interesting fact is that not all properties are subject to paying IBI. Some properties are exempt from payment:
- Any buildings related to a country’s defence
- Properties from the Red Cross
- Buildings that have been declared heritage sites
- Historic properties in big cities
- Diplomatic properties (from other countries)
- Buildings that are owned by the Autonomous Communities, the State or local entities, related to education and security (schools, police stations and prisons)
- Properties from the Catholic Church and other legally recognized religious organisations
What other interesting facts do you know about paying the IBI?