Do you want to sell or purchase a property in Spain? If so, who needs to pay the Spanish IBI real estate tax that same year? This matter is regulated in the Law for Local Tax Offices, which establishes that, for the purposes of this tax in Spain, rural and urban properties shall be considered to be in accordance with the definition that is given in the Property Cadastre or Land Registry regulations. If the same property is located in different municipalities, it is understood that it belongs to each one of those municipalities – with the corresponding size of the surface it occupies being taken into account.
Whenever there is a transfer or conveyance of a property in Spain that entails changing ownership, the Spanish property remains subject to the payment of the total sum of the tax, under a subsidiary liability regime, in the terms set out in the Spanish General Tax Law. When selling a property, the IBI (or Spanish real estate tax) must be paid by whoever was the owner on 1 January that same year in which the conveyance took place. The purchaser will pay the year after that.
At the time of signing the public purchase deed in Spain, the authorising notary public will request information on any possible outstanding Spanish real estate tax debt corresponding to the property that is being sold. They will provide advice about the period in which the interested party is obliged to pay the tax, as well as the liabilities that the party could incur if they do not pay. The Spanish Supreme Court set out in a June 2016 court ruling that, unless otherwise agreed, the seller who is paying the Spanish real estate tax may pass on the portion from the date of the sale to the purchaser, whether the property being sold is a plot, a house or premises.
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