Understanding IBI tax in Benitatxell

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What is the real estate tax (IBI)?

The IBI is a real and direct tax levied on the value of properties. The taxable amount shall comprise the cadastral value of the land and buildings on it. Cadastral values will be amended ex officio or at the request of the corresponding Town Council when substantial differences are detected between market prices and those which were used as the basis for the calculation of the current cadastral values, either as a result of a modification in town planning or other new circumstances.

How to pay the IBI tax

IBI tax can be paid through SUMA's electronic office, by direct debit or at the SUMA Teulada office.

Ordinance regulating the IBI tax

Revision of cadastral values:

The revision of cadastral values in Benitatxell from September 2024, which comes into effect in 2025, will lead to a very high increase in the amount of the IBI tax. Especially dramatic are the tax increases in Cumbre del Sol given the high market values. The collective valuation and updating of cadastral values made by the Cadastre in 2024 is expected to match 50% of the market value, leading to a huge increase in the IBI tax. 

IBI tax from 2025 onwards

The IBI increase due to the collective valuation and updating of cadastral values is spread over 10 years so that the first year a reduction of 90% is applied, the second year 80% and so on until 2033. From 2034 onwards no reduction is applied and the amount to be paid is the taxable base multiplied by the tax rate.

Table of reduction coefficients:

The decreasing reduction coefficients of the tax base means that the taxable base will be increasing in the next 10 years in the same proportion.

IBI tax rate in Benitatxell from 2018 till 2025:

The reduction of the tax rate approved in August 2024 in just one hundredth from 0.83% to 0.82% does not balance the update of cadastral values and has a merely symbolic character.

IBI calculation formula with an example of a 69 m2 apartment in Pueblo Panorama

1. Land value (*): 67.603,65€
2. Value of construction (*): 28.601,36€
3. Taxable base (Total cadastral value) = (1)+(2): 96.205,01€ 
4. Base value (**): 26.355,40€
5. Reduction coefficient (2025): 0,9
6. Reduction (2025) = (3)-(4)x(5): 62.864,65€
7. Net base (2025) = (3)-(6): 33.340,36€
8. Tax rate (2025): 0,82%
9. Tax liability = (7)x(8): 273,39€

• (*) See your IBI receipt
• (**) Cadastral value of land and construction in 2024

IBI tax forecast from 2025 to 2034 for a 69 m2 apartment in Pueblo Panorama

How to balance the tax burden

The Tax liability of our 69 m2 apartment taken as an example will increase from 273€ in 2025 to 789€ in 2034. The tax increase for larger buildings such as villas will be much higher. The Town Hall can mitigate such a high increase by reducing the tax rate (0.82% in 2025) significantly. Even if it were reduced to the legal minimum rate of 0.40%, the resulting net tax liability in the above example would be €385 in 2034, 70% higher than the tax liability in 2025. 

In order to keep the tax burden balanced it would be necessary to reduce the tax rate annually from the current 0.82% to levels similar to neighbouring municipalities like Moraira-Teulada (0.51%) and Benissa (0.55%). In the last 7 years however the Town Hall reduced the tax rate by 0.03% only. 

Average annual income from IBI tax and 10-year forecast

The income from IBI tax in 2025 was 3.050.000€ with an annual increase of 290.000€ compared to 2024 before the update of cadastral values. The IBI revenue is expected to increase every year by 290.000€ during the next 10 years in line with the increase in the tax base resulting from the decrease over the next 10 years in the reduction coefficients mentioned above.  In other words an extra income of more than 3 million euros is expected over the next 10 years resulting in IBI tax revenues of more than 6 million euros.

Comparison of the IBI tax rates in the Marina Alta (***)

• Minimun tax rate in Spain (Royal Decree 2/2004):   0,40 %
• Maximum tax rate in Spain (Royal Decree 2/2004): 1,10 %
• Local councils are entitled to set a tax rate between 0,40% and 1,10%

(***) Source: SUMA, statistics compiled in-house