The general rate of the Property Tax (IBI) in Madrid has been lowered to 0.4%, marking the sixth reduction in the past eight years. This change will impact 2.2 million receipts, providing a total saving of €31.2 million for taxpayers in the upcoming year.
This latest decrease positions Madrid among the three provincial capitals in Spain with the lowest general IBI rates, alongside Santander and Zaragoza. The reduction will benefit a variety of property types, including 1.53 million residential properties, 93,546 commercial properties, 30,363 offices, 10,704 industrial units, and 9,129 leisure and hospitality venues.
Since 2019, when the IBI rate was set at 0.510%, the cumulative savings for Madrid residents has reached approximately €1.565 billion. The new tax regulations, which will be formalised in 2027, are expected to maintain the fiscal relief for families, middle-class individuals, freelancers, and small to medium-sized enterprises.
Details of the new tax measures
The average IBI bill for a residential property with a cadastral value of €135,134 will be around €540 in 2027. If the previous rate of 0.510% had been applied, the bill would have risen to €689, resulting in a saving of €149 for the taxpayer.
Additionally, the council will continue to offer a 90% discount on the IBI for large families, benefiting around 37,000 households, which will save them €16 million in 2027. The new regulations will also introduce a revised Waste Management Tax (TGR) that incorporates five categories for waste separation, enhancing fairness and legal certainty in its calculation.
Waste management tax changes
The average fee for waste collection in 2027 is projected to remain at €143, similar to 2026. The council has opted not to include street cleaning costs in this tax, which has saved residents over €340 million since the law took effect in 2025.
The estimated revenue from the new waste tax is around €307 million, affecting approximately 1.7 million properties. Garages and storage units linked to residences will remain exempt from this tax, as will vacant lots and derelict buildings.
Furthermore, the council plans to maintain reductions for large families and those receiving minimum income support, which will benefit over 37,000 families and save them an estimated €5.4 million.
Additional tax reforms
In addition to the IBI and TGR adjustments, the Madrid city council will implement technical modifications to seven other ordinances, affecting minimal costs for taxpayers. These include changes to urban services, public health services, and vehicle parking regulations.
Previous tax reductions, such as those for property transfers and business activities, will also continue. Environmental incentives for solar energy installations and transport plans for employees will remain in place, promoting sustainability and economic growth in the city.
