Valencia Reduces ‘IBI’ Property Tax

The municipality of Valencia has declared a minimum 20 percent decrease in the IBI property tax for approximately 70,000 property owners, resulting in an average annual saving of €72.50 per homeowner. The IBI (Impuesto sobre Bienes Inmuebles), comparable to the UK’s council tax, is an annual fee based on a property’s value and location, typically paid by homeowners rather than tenants.

The city reports that this reduction will benefit 99 percent of residents, leading to a collective saving of €70 million. María José Ferrer San Segundo, the Councillor for the Treasury and first deputy mayor, criticized the prior government for subjecting citizens to “fiscal hell for eight years” and praised the tax and rate cuts approved by Mayor María José Catalá’s government as a significant relief for the city’s residents.

In practical terms, this tax reduction translates to an average savings of €72.50 per household, accounting for the €70 million total savings due to the 20 percent general rate cut.

Additionally, Valencia has implemented IBI discounts of up to 60 percent for large families in the general category and 90 percent for those in the special category, benefiting 3,800 qualifying large families.

“This will keep more money in the pockets of the people of Valencia, which will help boost the economy and foster job growth,” Ferrer stated.

Other tax reductions in Valencia include an 8.5 percent cut in the Vehicle Tax across all vehicle types, saving a total of €2,082,542.40. Furthermore, the inheritance capital gains tax from relatives has been lowered by the legal maximum of 95 percent, irrespective of the property’s cadastral value