Getting the entire IBI bill in one lump sum can feel financially overwhelming and, quite frankly, ridiculous. Many property owners are actually unaware though that there are options available to managing this tax a lot easier.
Instead of facing one single bill each year, you can opt to pay in six or twelve month installments. These options, offered by SUMA and a few select local banks, allow you to spread out payments throughout the year.
The Impuesto sobre Bienes Inmuebles (IBI), or Property Tax
Whether you own a home, commercial property, or land in Spain, you are required to pay this tax annually to your local government. The amount of IBI varies based on factors such as the value of the property, its location, the size, and what each region decides its rate is (within a nationally regulated range). It’s one of the primary sources of revenue for local municipalities in Spain, and funds essential services like infrastructure, public safety, and maintenance of public spaces.
Flexible Payment Options for IBI and other local taxes
Not everyone is aware that you can choose to pay your IB, refuse and water (in the towns where it is managed by the local municipality) in instalments rather than in a single lump sum. This can be particularly helpful if you prefer to manage your finances more evenly throughout the year.
1. Six-Month Instalments through SUMA
You can opt to spread your IBI payments over six months. However, this option comes with a small amount of interest. Despite the additional cost, many property owners find this method more manageable, especially if a large lump-sum payment is difficult to accommodate in their budget. To take advantage of this option, you need to manually set up the instalment plan each year by visiting your local SUMA office, which is responsible for managing municipal taxes in many regions of Spain.
2. Twelve-Month Instalments through Participating Banks.
Another convenient option is to join one of the region’s participating banks. SUMA will give you this list, and it’s usually the banks operating in the area. In this manner, you can spread your IBI (and other local taxes) over 12 months with no interest added. This system is perhaps the most convenient as once it’s set up, it automatically continues in subsequent years, requiring no further action on your part.
How to Set Up the Payment Plans
- For the 6-month SUMA instalments, you will need to visit your local SUMA office annually to manually set up the payment plan. Make sure to bring any necessary documentation, such as your IBI bill and identification.
- For the 12-month Bank instalments, you can set this up by contacting any of SUMA’s participating banks. The process typically involves signing a form authorizing the bank to divide and deduct the payments from your account each month. Once established, this plan will renew automatically each year.
Both of these options provide greater flexibility in managing your finances, allowing you to avoid the stress of a single large payment and better align your tax payments with your income flow. If you’re a property owner in Spain, consider exploring these payment methods to find the one that best suits your needs.
