It is approved the IBI rebate from Madrid City Council, applicable to premises for Leisure, Hospitality, Retail, Entertainment and Cultural use. This rebate (Real Estate Tax) was already applied in the fiscal year 2020, as a further measure to help against the economic effects of Covid-19.
The Official Gazette of the Community of Madrid (BOCM) of December 29, 2020 published the Agreement of the Plenary of the Madrid City Council. Plenary held on 23/12/2020, approving the modification of the Tax Ordinance regulating the Real Estate Tax.
IBI rebate from Madrid City Council
This modification, effective on January 1st, 2021, will be applicable with exclusive effects for the 2021 tax period. The main aspects of this modification are indicated below.
Types of allowances
These may be of two types.
- Bonificación of 50%. In the case of properties whose construction typology is included within one of the following modalities:
- Hotels, hostels, motels.
- Aparthotels, bungalows.
- Bonificación of 25%. For the remaining properties included in some of the indicated cadastral uses.
Who can apply for it
The above mentioned rebate will be applied on the integral quota of the tax in favor of those real estate of urban nature:
- When the cadastral use of the property corresponds to Leisure and Hostelry, Commercial, Spectacles or Cultural.
- In which an activity is carried out that has been declared of special interest or municipal utility.
To these effects, it will be considered that special interest or municipal utility exists, when the following requirements concur:
- That the activity had been exercised in the property on January 1st, 2021.
- That the activity continues to be carried out until December 31st, 2021.
- When the declaration of special interest or municipal utility will not proceed. When the activity carried out in the property is owned by an entity that has its tax domicile in a territory qualified as a tax haven. Confirm to the regulations in force.
To accredit the requirement of the existence of activity in the property, it will have to be contributed:
- Responsible declaration in which it is manifested the existence of activity on January 1st, 2021.
- And the commitment of its maintenance during the rest of the tax period.
Likewise, the fiscal domicile of the person or entity holder of the activity that is developed in the property must be indicated. As well as that the said domicile is not located in a territory qualified as a tax haven.
In those cases in which the taxpayer of the tax does not coincide with the owner of the activity carried out in the property. In order to be entitled to the rebate, it will be necessary that the taxpayer accredits that it has been made in favor of the owner of the activity:
- A moratorium or deferment in the payment of the rent.
- A reduction in the same.
- Or any other measure has been adopted, of analogous nature, that contributes to assure the maintenance of the activity.
When the adopted measure has been formalized by means of a document signed by both parts, this must be provided together with the mentioned responsible declaration.
The rebate is of a requested nature. Therefore, the declaration of special interest or municipal utility must be requested by means of a standardized form. Expressly until March 31, 2021. It will not be necessary to request it again in those cases in which the property had enjoyed the bonus in 2020. Provided that it is for the same activity,