IBI Property Tax on Mallorca: How It Is Calculated and How to Appeal

If you own property on Mallorca, a bill arrives every year that puzzles many new owners: the IBI property tax. This tax applies to everyone who owns a house, an apartment or a plot of land on the island, whether you live there or only use the property as a second home. The IBI is a municipal tax, and the amount depends on the cadastral value and your municipality's tax rate. In this post you will learn how the tax is calculated, when it is due and how to appeal against an incorrect bill.

What Is the IBI and Who Pays It?

The IBI (Impuesto sobre Bienes Inmuebles) is the Spanish property tax. Every property owner pays it once a year to the municipality where the property is located. The amount is the cadastral value multiplied by the municipal tax rate.

What matters is who is registered as the owner in the cadastre on January 1 of a given year. That person owes the full IBI for the whole year, even if the property is sold later. When buying a property, you should therefore agree clearly in the purchase contract who bears the IBI proportionally. How the purchase works otherwise is explained in our guide to buying property on Mallorca.

The IBI distinguishes between two property types:

• IBI Urbana for urban properties such as apartments, houses and buildable plots
• IBI Rústica for rural plots and fincas in the countryside

How Is the Property Tax on Mallorca Calculated?

The calculation is simple at its core: cadastral value times tax rate. The cadastral value (Valor Catastral) is the officially assessed value of your property and appears on the IBI bill. It is usually well below the actual market value.

Each municipality sets its own tax rate, within legal limits. Under the Spanish law on municipal finances (Real Decreto Legislativo 2/2004), the IBI rate for urban properties ranges between 0.4% and 1.1% of the cadastral value. Every municipality on Mallorca sets its own rate within this range, which is why the IBI in Palma can differ from Andratx or Pollença.

The rates shown are examples. You will find your actual rate on the bill or in your municipality's official gazette (Ordenanza Fiscal). If your cadastral value has risen sharply after a revaluation (Revisión Catastral), a transitional rule often applies that spreads the increase over several years.

When Is the IBI Due?

In the Balearics, the IBI in most municipalities is not collected by the town hall directly but by the ATIB (Agència Tributària de les Illes Balears). The ATIB is the Balearic tax agency and handles billing and collection for many municipalities.

The payment window (Periodo Voluntario) in many ATIB-managed municipalities falls in autumn, often from September to November. The ATIB publishes the exact period in advance each year. You have two ways to pay:

1. Direct debit (Domiciliación): You register your Spanish bank account once, after which the IBI is debited automatically. Many municipalities even give a small discount for direct debit.
2. Manual payment: You pay by transfer, online via the ATIB or at a counter within the deadline.

If you only have a second home on Mallorca, you pay the notional rental income tax on top of the IBI. How the two interact is explained in our post on second home taxes for non-residents.

Appealing Against an IBI Bill

An IBI bill can be wrong, usually because the cadastral value is set too high or the property is classified incorrectly. An inflated cadastral value hits you twice, because it also increases other taxes. An appeal can therefore be worthwhile.

The important distinction: you appeal against the cadastral value itself with the cadastre (Dirección General del Catastro), and against the specific IBI bill with the municipality or the ATIB. Each route has its own deadlines.

The official contact points, all in one place:

Frequently Asked Questions About the IBI

Who has to pay the IBI on Mallorca? The tax is owed by whoever is registered as the owner in the cadastre on January 1 of the year. This applies equally to residents and non-residents. If the property is sold during the year, the seller formally remains liable unless the contract says otherwise.

Can I deduct the IBI from my taxes? Only if you rent out the property. Then the IBI counts as a deductible expense against rental income. For a home you use yourself or an unrented second home, the IBI is not deductible.

What happens if the cadastral value is too high? An inflated cadastral value can be corrected through an appeal to the cadastre. Since the value also affects other taxes, the correction can pay off over several years. First check the surface area and property type on the bill.

Conclusion

The IBI property tax is a fixed annual cost for every property owner on Mallorca. The calculation follows a clear formula of cadastral value and municipal rate, which by law ranges between 0.4% and 1.1% for urban properties. It is usually collected by the ATIB in autumn, and a direct debit reliably protects you from surcharges.

Still, take a quick look at your bill every year, especially the cadastral value and the registered surface area. If the data is wrong, you generally have one month to appeal. For larger properties or unclear values, it is worth having a professional review the assessment; a well-founded challenge can save you money for years to come.