What happens to the Property Tax (IBI) for the current fiscal year in the event of property transfer?

11 April, 2024
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Fiscal, Real Estate
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Neus Vallara


The taxable event of the Property Tax (IBI) is the ownership, among others, of the right of property over a property. But what happens when, due to its transfer, the property has had several owners during the tax period? Who should pay it, the transferor or the acquirer? In this article, we analyze this issue.

The payment of the IBI for the current year of a property in case of transfer was a controversial issue until, in 2016, the Supreme Court settled this issue by issuing the well-known Judgment 409/2016, of June 15. Until that moment, given that the receipt was issued by the Administration to whoever was the owner on January 1, it was considered that it should be the transferor who paid it in full. Conversely, the aforementioned Judgment established a criterion consisting of the fact that, in the absence of an agreement, the transferor can pass on to the acquirer the proportional part of the tax that corresponds to him based on the time in which he has held the ownership.

The Judgment interprets several legal provisions and reaches the following conclusions:

It is indisputable that the taxpayer of the tax, in accordance with tax regulations, is whoever is the owner on January 1 of each year.

When article 63.2 of Royal Legislative Decree 2/2004, of March 5, approving the revised text of the Local Finance Law, mentions “the taxpayer’s ability to pass on the tax burden borne in accordance with the rules of common law“, it means that the transferor may pass on the tax, without the need for an agreement, to the acquirer.

Regarding the form of distribution, it will be governed by the rules of the sale. Thus, if it must be considered that the acquirer, unless otherwise indicated in the public instrument, acquires the property at the time of its delivery, he must assume the proportional share of the tax from that moment.

All of the above does not prevent the parties from agreeing on whatever they deem appropriate in the deed, whether it is assumed by the transferor or the acquirer in its entirety, 50%, or in any other way, since this possibility of passing on arises in the absence of an agreement.

How is the assumption of the IBI prorated agreed upon in the transfer deed?

Although, as we have indicated, the rule of repercussion is established in the absence of an agreement, in order to avoid conflicts or any subsequent claims, it is advisable to include in the transfer deed a clause stating that the parties agree that the IBI for the current year will be assumed between them “prorrata temporis“. Additionally, it is also recommended to regulate how the payment will be made. The most common option, as it avoids many conflicts, is as follows:

The transferor assumes the advance payment of the receipt before the Administration: since the transferor is the holder of this receipt in his capacity as taxpayer, he will also be the debtor in case of non-payment. Thus, the transferor is the first interested party in the payment. On the other hand, the acquirer, before making any payment to the transferor, must ensure that the receipt is paid, in order to prevent the transferor from using the proportional amount for another purpose.

The payment of the tax will be made within the voluntary payment period: if for any reason, the transferor incurs delays that generate interest and surcharges, the acquirer does not have to assume the proportional part of these concepts. Thus, if it is agreed in the transfer deed that the payment by the transferor will be made within the voluntary payment period, it prevents other additional concepts from being passed on to the tax quota.

The acquirer must pay the proportional amount due to the transferor within a specified period: it can be one week, ten days, or one month, but setting a deadline facilitates subsequent claim in case of non-compliance by the acquirer.

In short, the proportional part of the IBI for the current year can be passed on to the acquirer, although it is recommended to regulate in the transfer deed, if possible in the clearest and most concrete way, the assumption method.

At MES Advocats, we offer comprehensive advice and support in the acquisition of all types of real estate, whether you are the transferor or the acquirer. If you need more information or are interested in obtaining a quote, you can contact our real estate law area at this link.

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