{"id":2268820,"date":"2026-10-21T13:14:13","date_gmt":"2026-10-21T10:14:13","guid":{"rendered":"https:\/\/alegria-realestate.com\/?p=2268820"},"modified":"2026-10-22T13:54:11","modified_gmt":"2026-10-22T10:54:11","slug":"madrid-property-tax-ibi-reduction-2027","status":"publish","type":"post","link":"https:\/\/alegria-realestate.com\/en\/articles\/taxes-and-laws\/madrid-property-tax-ibi-reduction-2027","title":{"rendered":"Madrid to Reduce IBI Property Tax to the Legal Minimum in 2027"},"content":{"rendered":"<p>Madrid Mayor Jos\u00e9 Luis Mart\u00ednez-Almeida has announced that the city&#8217;s standard <a href=\"https:\/\/alegria-realestate.com\/en\/articles\/ibi-tax-in-spain\">property tax (Impuesto sobre Bienes Inmuebles, IBI)<\/a> rate will be reduced from 0.414% to 0.4% in 2027, reaching the minimum permitted under Spanish law. Any further reduction in the standard rate for urban properties would require a change in legislation.<\/p>\n<p>This would make <a href=\"https:\/\/alegria-realestate.com\/en\/sale\/madrid\">Madrid<\/a> one of three Spanish provincial capitals with the lowest standard IBI rate, alongside Santander and Zaragoza. By comparison, the average rate across Spain is approximately 0.6%, while Barcelona&#8217;s stands at 0.66%.<\/p>\n<p>On October 15, 2026, Madrid&#8217;s municipal executive board gave initial approval to the draft tax ordinances for 2027. The proposal includes the sixth reduction in the IBI rate since Mart\u00ednez-Almeida took office in 2019.<\/p>\n<h2>Who Will Benefit from Madrid&#8217;s Property Tax Reduction?<\/h2>\n<p>According to the city council, the lower IBI rate will affect approximately 2.27 million tax bills. Beneficiaries include homeowners, self-employed professionals, and small and medium-sized businesses.<\/p>\n<p>The new rate will apply to the following property categories:<\/p>\n<ul>\n<li><strong>1.53 million<\/strong> residential properties.<\/li>\n<li><strong>93,546<\/strong> commercial properties.<\/li>\n<li><strong>30,363<\/strong> office premises.<\/li>\n<li><strong>10,704<\/strong> industrial properties.<\/li>\n<li><strong>9,129<\/strong> leisure and hospitality properties.<\/li>\n<\/ul>\n<p>In Madrid, 79% of residential properties have a cadastral value below \u20ac150,000. According to city council estimates, a residential property with a cadastral value of \u20ac135,134 would incur an annual IBI bill of approximately <strong>\u20ac540 in 2027<\/strong>.<\/p>\n<p>For comparison, at the 0.510% rate applicable in 2019, the same property would have incurred a tax bill of \u20ac689. The annual saving compared with the 2019 rate would therefore reach \u20ac149.<\/p>\n<h2>IBI Discounts for Large Families in Madrid<\/h2>\n<p>The IBI tax relief introduced in 2020 for officially recognised large families (familias numerosas) will remain in place in 2027. Depending on the property&#8217;s cadastral value, the discount can reach <strong>90%<\/strong>.<\/p>\n<p>Approximately 37,000 families in Madrid benefit from this measure. The city council estimates that they will save a combined \u20ac16 million in 2027.<\/p>\n<p>In most cases, the discount is applied automatically, without requiring a separate application.<\/p>\n<h2>Changes to Other Municipal Taxes and Fees<\/h2>\n<p>The municipal executive board has also approved technical amendments to other tax ordinances. These are not expected to result in additional costs for taxpayers, or would involve only minimal expenses.<\/p>\n<p>The amendments cover:<\/p>\n<ul>\n<li>Urban planning services.<\/li>\n<li>Public hygiene and health services.<\/li>\n<li>Examination participation fees.<\/li>\n<li>Vehicle parking in designated areas of the city.<\/li>\n<li>Tax administration, collection and enforcement.<\/li>\n<li>Motor Vehicle Tax (IVTM).<\/li>\n<li>Services for reproducing images and documents.<\/li>\n<\/ul>\n<p>The city council also plans to revise the calculation of the municipal waste collection and treatment fee. In 2027, the calculation is expected to take account not only of the volume of waste generated but also of the quality of waste separation across five categories. The average annual fee is estimated at around \u20ac143, virtually unchanged from 2026.<\/p>\n<h2>Tax Relief on Inherited Property and Construction Work<\/h2>\n<p>Madrid will retain previously approved tax benefits, including relief on the municipal tax on increases in urban land value, commonly known as <a href=\"https:\/\/alegria-realestate.com\/en\/articles\/plusvalia-municipal\">plusval\u00eda municipal<\/a>.<\/p>\n<p>When a primary residence or commercial premises is inherited by a spouse, direct ascendant or direct descendant, the tax discount can reach <strong>95%<\/strong>, subject to the applicable conditions.<\/p>\n<p>The reduction in the Construction, Installations and Works Tax (Impuesto sobre Construcciones, Instalaciones y Obras, ICIO) rate from 4% to 3.75% will also remain in effect.<\/p>\n<p>An ICIO discount of 20% will continue to apply to the installation of electric vehicle charging stations. A 50% discount is available for installations that use solar energy.<\/p>\n<blockquote><p>Planning to buy a home? Read our guide to <a href=\"https:\/\/alegria-realestate.com\/en\/articles\/expenses-and-taxes-when-buying-a-home\">costs and taxes when buying property in Spain in 2026<\/a>, covering the main expenses associated with a property purchase.<\/p><\/blockquote>\n<h2>Tax Incentives for Businesses in Madrid<\/h2>\n<p>The city administration will also maintain tax incentives aimed at supporting entrepreneurship and job creation.<\/p>\n<p>These include relief under the Business Activities Tax (Impuesto sobre Actividades Econ\u00f3micas, IAE) for new businesses and companies creating additional jobs.<\/p>\n<p>Businesses implementing renewable energy systems, including solar and geothermal installations, will continue to qualify for a 50% IAE discount.<\/p>\n<p>Companies introducing employee transport plans may also receive a tax discount of up to 50%, provided they meet certain conditions:<\/p>\n<ul>\n<li>The transport plan must cover at least 20% of employees.<\/li>\n<li>The company must either enter into an agreement with a transport operator or provide evidence of purchasing annual public transport passes.<\/li>\n<\/ul>\n<p>A 95% IBI discount will also remain available to Madrid&#8217;s historic retail businesses that have been operating for more than 100 years.<\/p>\n<h2>How Much Will Madrid Taxpayers Save?<\/h2>\n<p>According to Mayor Jos\u00e9 Luis Mart\u00ednez-Almeida, the proposed municipal tax ordinances will further reduce the city&#8217;s tax burden.<\/p>\n<p>City council estimates indicate that the lower IBI rate will save Madrid residents and property owners a total of <strong>\u20ac31.2 million in 2027<\/strong> compared with 2026.<\/p>\n<p>The proposed reduction continues the municipal administration&#8217;s tax policy. According to its calculations, the combined savings resulting from tax and fee reductions since 2019 will amount to nearly <strong>\u20ac1.565 billion<\/strong>.<\/p>\n<p>If the new ordinances receive final approval, Madrid will reach the lowest standard IBI rate permitted by law while maintaining a range of tax benefits for families, homeowners and businesses.<\/p>\n<p>Explore <a href=\"https:\/\/alegria-realestate.com\/en\/sale\/madrid\">properties for sale in Madrid<\/a> in the Alegria Real Estate catalogue.<\/p>","protected":false},"excerpt":{"rendered":"<p>Madrid Mayor Jos\u00e9 Luis Mart\u00ednez-Almeida has announced that the\u2026<\/p>\n","protected":false},"author":34,"featured_media":2268848,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[961],"tags":[],"class_list":["post-2268820","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-taxes-and-laws"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.7 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Madrid to cut IBI property tax to 0.4% in 2027<\/title>\n<meta name=\"description\" content=\"In 2027, Madrid\u2019s IBI rate will fall from 0.414% to 0.4%. 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