Tax time is here: What is IBI?

May and June are traditionally the months to pay the “annual rates” if you have a property in Canary Islands.

In Clear Blue Skies we always recommend our clients to use an accountant, a lawyer or a “gestor” since the moment they buy a property in Tenerife but especially when it comes to deal with property taxes.

IBI (Impuesto sobre Bienes Inmuebles) is the annual property tax to be paid by every property owner. This is a local tax to be paid to the corresponding town hall and varies widely from one municipality to another and from one type of property to another. For instance, a small house in a rural area could be about 70 € while a luxury home on a exclusive coastal area could go to 2.500 € or more.

If you don’t live in Spain permanently or you only use your property for holiday purposes it is always better to arrange the IBI payment by direct debit. Even if you live here it is easier to pay your local taxes by direct debit to avoid you the journey to your local town hall and handle all the paperwork in a foreign language, especially if you don’t speak Spanish fluently. Also, if the IBI is not paid in the due time you will find the unpleasant surprise that you have to pay interest penalty for being late.

So… it is tax time!!

Okay, the exclamation mark probably doesn’t reflect your true feelings. But I wouldn’t like to finish this article with a sad face. Think that taxes in Spain are lower than in the rest of Europe. Compare the property taxes that you pay in your own country with the ones you pay here. Our local taxes help to improve our roads and local facilities. And finally… you are not that upset about paying your Tenerife taxes. Aren’t you? Let’s put a smile on your face!!