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Everything you need to know about the IBI

The acronym “IBI” appears very often in the tax and real estate world, but in short, what is IBI, how to calculate the IBI, who should pay it?

Here at Withfor, high standing ethical real estate agency in Barcelona, we will explain everything related to this tax in this article.

What is the IBI?

The IBI is the Real Estate Tax, and its rank of importance comes from the data it can provide on rural or urban buildings. In other words, it is like a basic guide to essential data about a property.

Thus, the characteristics of this tax are as follows:

  • It is imposed on the holder of the rights over a real estate property.
  • It is a direct and compulsory tax.
  • It is a local or municipal tax, i.e. it is levied by the local councils and forms part of the municipal taxes.
  • It requires annual payment.
  • It exists in the form of a receipt.

So, every time you buy a property, whether it is a house, flat, business premises, land or car park, you will be obliged to register with the General Directorate of Cadastre, which will issue your bill annually.

How is it calculated?

To calculate the IBI of a house, we need to take into account different variables that start from the so-called cadastral value -which is valid for 10 years-, in which values such as are taken into account:

  • The population.
  • Age of the building.
  • Value of the land or property on the current market.
  • Urban characteristics of the land.
  • Material cost of the buildings.
  • Location of the property.

Other coefficients are applied, but to summarise, to get an idea, IBI is usually calculated according to the cadastral value of the property, to which a series of coefficients, reductions and a final tax rate that will depend on each Town Hall must be added.

In the case of Catalonia, the current rate is 0.66% for 2022.

For more details on the calculation of the cadastral value, we recommend you read: how to know the cadastral value of a property.

Who pays it, tenant or owner?

In order to know who pays the IBI in a sale and purchase, it must be understood that, when it comes to everything related to taxes on the sale of a property, it is the owner or seller who must take charge and assume these expenses.

This is because in order to finalise the sale, the property must be free of debts, before any transaction on the real estate.

It is also true that this can be negotiated in the purchase contract. The important thing is that everything is clearly stated in the document, which is why it is essential to be well informed about how to sell a flat.

However, to make sure that you are acquiring a property that is solvent with the IBI as usufructuary, you can always ask for proof of payment of the last IBI receipts.

On the other hand, if the property has been inherited, it is the owner who should pay this tax.

Finally, there may be some particular cases that generate doubts, such as: who pays the IBI on a foreclosed flat, who pays the IBI on a deceased person, or who pays the IBI on the property of a deceased person? Or who pays the IBI on a new property? In these cases it will be decided according to the periods, that is to say, the payment will correspond to whoever is the owner on the first day of the year.

When is IBI paid?

Each Town Hall manages the dates when this payment has to be made, but generally, every 1st of January is taken into account. Therefore, whoever appears as the owner on the register of the property on this date must pay the tax.

However, in Barcelona the tax can be paid in the following way:

1st period: payable on 3 March.

2nd period: payable on June 3rd.

3rd period: then paid on 3 September.

4th period: finally, it is paid on 3 December.

However, if you do not have a direct debit, you will have to make a single payment between 1 March and 4 May.

How to pay IBI in Barcelona

  • By internet: you can pay by card and without the need for a digital certificate.
  • By telephone: this is a free call. You can call 010 if you are calling from Barcelona.
  • At kiosks: these are electronic self-service terminals located in different parts of the city.
  • At partner financial institutions: Banco Sabadell, Banco Santander, BBVA and CaixaBank.

You can always get more information on the Barcelona City Council website to find out about tax relief (especially for large families or for new constructions and comprehensive refurbishment work) and instalments.

What you should bear in mind, however, is that if you do not meet the payment deadlines, penalties of up to 20% may be applied.

How much will IBI be paid in 2022?

As we already commented the IBI in Barcelona is equivalent to 0.66%, so if we apply the formula and we make a calculation with a simple example we say that, in the case of having a house with a cadastral value of 50 000 €, you will have to multiply those 50.000 x 0,0066, which gives as a result 330 euros.

Remember that in Withfor we are at your disposal to solve any doubt or to help you with the management that you need. You can come to our offices or contact us at +34 934 144 843 or at info@withfor.com without any commitment. We will be pleased to help you.

We are with you and for you.

Categories
Advice Real Estate News

What green mortgages are and how they work

Today, global warming is being tackled from every possible angle. The financial and real estate sector has developed products such as green mortgages, which are committed to sustainability and ecology.

It is true that, although they have not yet made a big impact in the Spanish market, they are a great help if, for example, you want to buy a luxury flat in Barcelona and make it comply with energy efficiency standards.

Let’s take a closer look at what green mortgages are and how they work.

 

What is a green mortgage?

Like a traditional mortgage, it is a financial loan. The difference is that green mortgages are specially designed for the construction, acquisition, or rehabilitation of a sustainable home.

According to data from the Ministry for Ecological Transition and the Demographic Challenge, buildings represent a 40% of final energy consumption in the European Union, as the vast majority of them were built in the 1950s, before energy efficiency regulations for housing were in force.

For this reason, this financial alternative is committed to ecology and sustainability, and is accommodating to eco-friendly home renovation or construction projects, as it entails interest reductions and lower risk.

 

The benefits it offers

  • Low interest rate

Banks that offer green mortgage credit often reward the social sensitivity of their customers by making the mortgage interest rate lower. In other words, the more efficient a home is, the lower the mortgage interest rate can be.

  • Energy saving

Although it is a loan, it can also translate into long-term savings. Homes with A+ energy certification consume less energy, which means a reduction in costs (between 3,000 and 4,000 euros per year).

  • Lower risk

The risk profiles for this type of credit are low. This is due to the fact that, as it is a loan with a reduced interest rate, the instalments to be paid are usually lower.

  • Revaluation of the property

Buying or rehabilitating a property to improve its energy efficiency levels is not only an investment that helps to reduce the impact on the environment, but also means the possibility of selling it at a profit in the future. The real estate market is increasingly focusing on sustainable housing and, in short, it is a smart investment.

 

Main banks that offer them in Spain

Below is a list of the banks that currently offer this type of product:

Banco Nombre
Triodos Bank Sustainable Mortgages
Liberbank Oxygen Mortgage
Banco Santander Sustainable home mortgages
BBVA Efficient Home Mortgage
Cajamar Green Mortgage
Mediolanum Freedom Green Mortgage
Bankinter Hipoteca joven casa eficiente

 

Examples of banks offering green mortgages

Triodos Bank is one of the banks in charge of coordinating the implementation of the EeMap Project, a pilot project for green mortgages that started in 2018 with standardised conditions across Europe and is still progressing.

In addition to being a certified B Corp company, they are the leaders in green lending as they link the interest rates of their mortgages to the energy rating of the home. In other words, the better the energy rating of the property, the lower the interest rate they charge.

Who is eligible?

Basically, anyone who meets the requirements can apply for a green mortgage loan. These are:

  • The property has an energy certificate type A or A+. In the case of applying for a loan for a renovation, it must be guaranteed that the construction allows reaching these levels of energy efficiency.
  • As with any other financing, it is necessary to demonstrate sufficient solvency to repay the loan.
  • National Identity Card (DNI).
  • Last income tax return.
  • Salary and credit history.

 

And why do we recommend a green mortgage?

As we have mentioned before, investing in green mortgages guarantees lower energy bills, thanks to the efficiency of the supplies and the better insulation that can be installed in the house.

From Withfor, luxury real estate Barcelona, we are committed to sustainability. We are convinced that this is a way in which we can contribute to a reduction in the environmental impact, reduce pollution and promote a more sustainable future.

In fact, many people think that green mortgages are associated exclusively with luxury or high-end housing and, on the contrary, this is not always the case.

The saving that is generated at energetic level, can compensate the price of the property and, above all, demonstrates a bet for a sustainable life being responsible with the environment.

Remember that in Withfor, we are always at your disposal for any management you need, whether you are looking for information about luxury rentals in Barcelona or any other subject, contact us without any obligation! We are here to help you.