IBI or “Impuesto sobre Bienes Inmuebles” is the payment property owners make each year to their local councils and is the equivalent of the UK’s rates, or council tax.

The calculation is a percentage (set by each Ayuntamiento, or town hall every year) of the Valor Catastral (value) of the property as registered at the land registry. This value is usually lower than the actual value of the property. The percentage charged varies according to the level of service provided by the respective town hall. So in a rural area with few services, an owner could pay less than €100 per year, and in urban areas much more.

The town halls don’t have any obligation to send out reminder letters, although many do, but it’s up to owners to visit their ayuntamiento each year and collect their bills, which are due for payment during October to December of each year. Using your NIF / NIE number to identify you, the clerk will provide you with a print-out showing the amount due for each property or piece of land you own, and you’ll also find the road tax due on any vehicles, on the same form. It is possible to set up a direct debit for these payments whilst there.

Failure to pay on time (Usually the 22nd December) will result in charges being added to the account.

As an example, Yaiza municipality which covers Playa Blanca Lanzarote, has a current rate of 0.4659%. So for a property with a valor catastral of €90,000, the payment would be €419.31. You can check last year’s IBI bill to get an idea of the catastral value of your property.