Is the buyer entitled to know the property tax debt (IBI) of a property?

19 March, 2024
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Real Estate
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Neus Vallara


When doing transactions, we do not always have the collaboration of the seller to know the property tax debt (IBI) of a property. For example, in the case of an assignment or transfer in a mortgage foreclosure or in an extrajudicial sale (notarial auction), the transfer is usually made without the seller’s involvement. In most of these cases, when contacting the local council or the corresponding Tax Management Organization to find out the property’s debt, the first response is usually a refusal to disclose this information, which is based on personal data protection regulations.

However, from a combined interpretation of several articles of the Law of Administrative Procedure, the Consolidated Text of the Law Regulating Local Finances, and the General Tax Law, it can be inferred that the purchaser of a property is entitled to know the debt that exists regarding it before its acquisition.

Let’s take a look at these articles:

Article 64 of the Consolidated Text of the Law Regulating Local Finances, which establishes that real estate properties, in case of transmission, are subject to the payment of the entire tax quota on a subsidiary liability basis. That is to say, unpaid property tax quotas are carried over with the property, so the new acquirer may end up being liable for the unpaid debts of previous owners. Although this procedure always requires, as a prior condition, that the main debtor be declared bankrupt, the new acquirer is next in line since they are the owner of the affected property.

The same Article 64 cited in the previous point establishes that notaries will request information and, in the documents they authorize, they will specifically warn the parties about pending debts for the Property Tax associated with the property. Thus, the acquirer, as a party present, is recognized the right to know the debt status of a property at the time of its acquisition. The question is whether this legitimacy should be limited to the moment when the deed is formalized or whether it should be recognized that, due to its significance, it can be invoked beforehand.

Article 78 of the General Tax Law: The Property Tax debt for the current calendar year and the immediate previous one takes precedence over any other creditor or acquirer, even if the corresponding authority has not registered its right (tacit legal mortgage). The tacit legal mortgage is a direct liability that does not require the main debtor to be declared bankrupt.

Article 4 of the Law on Common Administrative Procedure of Public Administrations: This article determines who has the status of interested party in an administrative procedure, including those who, without having initiated the procedure, have rights that may be affected by the decision taken in the procedure. It is evident that the existence of a Property Tax debt that is subsequently claimed through the relevant legal process can affect the rights of the future purchaser of the property.

The conclusion of all this is that the future purchaser of a property should be considered to be entitled to know the Property Tax debt of a property, since this legitimacy is already recognized at the time of acquisition and due to the direct or indirect responsibility that they may assume, which clearly affects their rights. A different issue will be the means to prove legitimacy based on the future acquisition, since it is logical and reasonable for the administration to limit access to such information only to those who can demonstrate that legitimate interest.

A few weeks ago, after receiving a client’s request to conduct the Due Diligence of a property in view of its future acquisition, I encountered the usual refusal from the Administration to provide the Property Tax debt information. I then submitted a request in the terms outlined in this article, and I promptly received the requested information. This experience allows me to assert that, with a legally argued petition, the likelihood of receiving an arbitrary decision from the Public Administration is reduced. Furthermore, regarding the potential violation of the right to the protection of personal data, while in the case of individuals it may be a controversial issue or, at the very least, it can be understood that there is a collision of rights, in the case of legal entities, it can be argued that they are not holders of the right to the protection of personal data, given that the Organic Law 3/2018, of December 5, limits its scope to the protection of individuals.

If you have any doubts or need more information, you can contact the real estate law department of MES ADVOCATS at the following link.

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