The General Tax Act provides that an IBI bill left unpaid within the voluntary period enters the enforcement period the following day, with a surcharge that starts at 5 % and ends at 20 % plus late-payment interest, and that the council can collect by seizing the money in your accounts, your salary or pension and, at the end of the legal order, the property itself (articles 28, 161 and 169 of Law 58/2003). In practice the first thing that arrives is an enforcement order sent to the address on the tax roll and, once the deadline it opens has run, a hold on the account into which your salary is paid; the home is entered in the Land Registry as seized, but an auction over a bill of a few hundred euros is exceptional. There is no penalty for failing to pay the IBI, there is a surcharge and interest, and the debt prescribes after four years if the council lets that time pass without validly claiming it.
With the road tax and with municipal fines the scheme is the same, because all three debts are collected through the enforcement procedure of the General Tax Act and the General Collection Regulations (Royal Decree 939/2005). What changes is the starting point and, for fines, the chance to contest the penalty before it becomes final. I will go through it by stage, because what you can do and what suits you depend on which stage you are at.
Where your debt stands, and how to find out this afternoon
Before paying anything and before instructing anyone, place the debt on the map. There are four possible positions, an overdue bill with no document received yet, an enforcement order already served, a seizure already executed on your account or salary, and a seizure entry registered against your home. Each has a different way out and a different cost.
What you can do today on your own is gather facts. Ask the council’s collection office, or the provincial council if collection has been delegated to it, as is the case in many Galician municipalities, for a certificate of outstanding debts listing each item, the tax year and the date of the enforcement order if there is one. Keep the envelope and the delivery receipt of any notification you have, because the delivery date and the signature of whoever took it are the facts that later decide whether the enforcement can be challenged. Check what address appears in the Cadastre and on the taxpayer roll, because that is where they will serve notice. Find in the council’s tax calendar the closing date of the voluntary period for that bill, because both the surcharge and the prescription run from it.
And two things not to do yet. Do not sign an acknowledgement of debt and do not request a deferral of a bill that may already be time-barred, because that step interrupts the prescription, as I explain below. If the debt has no enforcement order yet, the cheap route is usually to pay with the 5 %; if the order has arrived, to pay within its deadline with the 10 %. What follows is for working out whether, in your case, there is something better than paying.
From the unpaid bill to the 20 % surcharge, the timetable in article 28
The IBI and the vehicle tax are periodic taxes collected by bill, and their voluntary period is whatever each council fixes in its tax calendar; absent a calendar of its own, article 62.3 of the General Tax Act places it between 1 September and 20 November. The day after that period closes, the enforcement period begins (article 161), without warning and without any prior decision. From that day the amount is no longer the amount on the bill, and what gets added depends solely on when you pay.
| When you pay | Surcharge | Late-payment interest |
|---|---|---|
| After the voluntary period closes and before the enforcement order is served on you | 5 % (enforcement-period surcharge) | No |
| Within the deadline opened by the enforcement order (article 62.5 LGT) | 10 % (reduced enforcement surcharge) | No |
| After that deadline | 20 % (ordinary enforcement surcharge) | Yes, from the close of the voluntary period |
| Traffic fine paid within twenty calendar days of service of the complaint (article 94 of the Road Traffic Act) | 50 % reduction | No |
The three surcharges are mutually exclusive (article 28); whoever pays with the 10 % never sees the 20 %. Late-payment interest (article 26) only appears with the ordinary surcharge and runs from the day after the voluntary period closes until payment, at the rate fixed each year in the Budget Act. On top come the costs of the enforcement procedure (article 161.4), small in a bank account seizure and larger if there is a registry entry or a valuation of a property.
There is no penalty. Tax penalties punish infringements, such as failing to file a self-assessment, and the IBI is assessed by the council, not by the taxpayer. Headlines that speak of a “fine for not paying the IBI” mix up different things. The same goes for a traffic fine, failing to pay it does not generate another penalty, it generates the same surcharge.
The enforcement order and the deadline in article 62.5
The enforcement order is the act that formally opens compulsory collection (article 167). It is an enforceable title with the same force as a judgment, it is issued by the collection body and not by a judge, and it must be served personally, which is not the case with the annual bill. Once the entry on the tax roll has been notified, subsequent bills are notified collectively by public notice (article 102.3), so not having received the bill at home is no defect at all. The enforcement order, by contrast, has to reach you, and the council has to be able to prove it did.
The order demands the debt with the 10 % and opens the deadline in article 62.5. If it is served between the 1st and the 15th of the month, you can pay until the 20th of that month; if between the 16th and the last day, until the 5th of the following month. After that day the surcharge rises to 20 %, interest accrues and the council is free to seize without any further formality. It is also the document against which an appeal lies, within one month of service, by way of an application for reconsideration, which for local taxes is mandatory before going to the administrative courts (article 14.2 of Royal Legislative Decree 2/2004, the consolidated Local Finance Act). In large-population municipalities the route also passes through the municipal economic-administrative tribunal.
Challenging the enforcement order, the closed list of grounds in article 167.3
Not every argument works against an enforcement order. The law closes the list (article 167.3), and an appeal that pleads anything else, that the bill is high, that the cadastral value is wrong or that there is no money, is dismissed without looking at the merits. The admitted grounds are these.
- Total extinction of the debt or prescription of the right to demand payment.
- A request for deferral, instalments or set-off filed during the voluntary period, or another cause of suspension of the procedure.
- Failure to notify the assessment.
- Annulment of the assessment.
- An error or omission in the content of the order that makes it impossible to identify the debtor or the debt.
In practice the two that succeed are prescription and failure of notification, because councils carry old bills forward and cannot always evidence a valid act that interrupted the time limit, and because service by public notice is used a great deal and not always with the requirements met. The deferral requested in the voluntary period works if you asked in time and have it documented; annulment of the assessment requires having first won an appeal against the bill; an error in the order is rare, but it happens when the order misidentifies the tax year or the property.
Here I owe the reader some honesty. If your debt is one or two bills, the voluntary period closed months ago and you were served by hand, there is no appeal to be won, and what pays is to settle within the deadline with the 10 %. An appeal pays when the debt spans several years, when you never received anything, when you already paid and are being asked again, or when assets have been seized that should not have been. How the appeal is framed, what is requested and with what evidence is the lawyer’s work, because a poorly drafted submission uses up the only month the law grants.
Filing the appeal does not stop collection. Article 14.2 of the consolidated Act allows a request for suspension, but only if the amount is guaranteed together with interest and surcharges, by deposit, bank guarantee or, for small debts and where the by-law permits it, the personal guarantee of two solvent taxpayers. Without a guarantee, suspension is only available where the act contains an obvious clerical or arithmetical error. If you win, the administration returns what was guaranteed or collected with interest; if you lose, you pay late-payment interest for the whole period of suspension.
Debts that surface years later, defective service and service by public notice
The case that most often triggers this search is the letter with a 20 % surcharge for bills from three or four years ago that nobody knew about. Two notifications have to be kept apart. The bill is not served personally and its public notice in the provincial gazette is valid. The enforcement order does have to be served personally, and if that was done badly the consequence is not that the debt vanishes, but that the surcharge drops from 20 % to 10 %, a seizure executed without that service can be challenged (article 170.3) and, if four years meanwhile passed without another valid act, the debt is time-barred.
Service is valid when it is attempted at the debtor’s tax address, twice on different days and at different hours if the first attempt fails (article 42 of Law 39/2015 and article 112 of the General Tax Act), and only then is it published in the Official State Gazette so that the debtor appears within fifteen calendar days. A notification that omits the full text of the act, the available appeals or the time limit is defective, and only takes effect from the moment the person concerned acts in a way that shows knowledge of it or lodges an appeal (article 40.3 of Law 39/2015). With the administrative file in front of you, every attempt, every hour and every signature can be checked, and that is where it is decided whether the order stands.
There is a limit you should know about. The tax address is the one you communicated, and the duty to report a change is yours (article 48.3). If you moved and did not update it with the council or the Cadastre, the attempts at the old address and the later public notice are valid, and the argument that “nothing ever reached me” does not work. It does work when the administration knew your real address through other channels, for instance because you appear on the municipal register of residents of the same town, and still served notice at the empty property; the courts require reasonable diligence from the administration before accepting service by public notice.
Four years to prescription, and what the council does to stop the clock
The right to demand payment of an assessed debt prescribes after four years (article 66.b), counted from the day after the close of the voluntary period for that bill (article 67). An IBI whose voluntary period ended on 20 November 2022 prescribes on 21 November 2026 if nothing has happened in between. Prescription applies of its own motion (article 69), so the council should recognise it without being asked; in practice it is asked for, and asked for in writing.
What almost nobody explains is article 68. The time limit is interrupted, and starts again from zero, by any action of the administration aimed at collection and carried out with the debtor’s formal knowledge, by the lodging of an appeal or claim, and by any reliable act of the debtor himself directed at payment, such as requesting a deferral, signing an acknowledgement of debt or paying a part. The enforcement order, the seizure order and the public notice all interrupt the period, provided they are served with the legal requirements met; the annual bill, an informative letter with no force as an act and a defective attempt at service do not.
Waiting four years is not a strategy, unless it is established that the council has failed to serve anything valid in that time. For the same reason, before requesting a deferral or paying “just to be rid of it” the dates have to be looked at, because that step reopens the clock on a debt that perhaps could no longer be demanded.
For traffic fines the time limits are in article 112 of the Road Traffic Act. The offence prescribes after three months if minor and after six if serious or very serious, counted from the day of the facts, so a parking complaint that is not served within three months can no longer be punished. The procedure lapses if a year passes from its opening without a decision being served. A fine that has become final prescribes four years after it became final, with the same interruptions of the General Tax Act once it enters enforcement.
Seizure, and why the bank account and the salary come before the house
Once the article 62.5 deadline has passed without payment or appeal, the council issues the seizure order (article 170) and follows the order of priority in article 169, which is what explains what really happens. First cash and money in bank accounts, then receivables and securities realisable in the short term, then wages, salaries and pensions, then real property, and only after that rents, businesses, precious metals, movables and long-term receivables. The seizure must respect proportionality and be limited to what is needed to cover the debt, surcharges, interest and costs, and you can ask for the order to be altered if you point to assets that secure collection just as effectively with less harm (article 169.4).
That is why the first thing to arrive is the hold on the account. The council, or the provincial council, sends the order to the bank, which freezes the balance up to the amount of the debt and, after a short period with no lifting order, pays it over. The seizure order is notified to you after it has been executed, not before, because a warning would defeat it (article 170.1). The law sets no time limit between the enforcement order and the seizure, and a council with computerised collection sends the order to the banks shortly after the 62.5 deadline expires; the registry entry against the home comes later, when the seizure of accounts and salary does not cover the debt or there is no balance.
If your salary or pension is paid into that account, the seizure has a ceiling. Article 171.3 of the General Tax Act requires the limits of article 607 of the Civil Procedure Act to be applied to the amount paid in under that heading in the month of the seizure. That article declares the statutory minimum wage unseizable and allows seizure, of what exceeds it, of 30 % of the band up to twice the minimum, 50 % of the third band, 60 % of the fourth, 75 % of the fifth and 90 % of anything above, with a further reduction that can be requested for family dependants. Savings sitting in the account above that month’s salary have no protection. And the limit does not apply by itself, it has to be demanded when the bank or the collection office does not respect it, which happens often in automated seizures.
At the firm, when a matter arrives with the seizure already executed, we review the chain of notifications in the file and, if there is prescription, a defect of service or an excess in what was seized, we challenge it and claim back what was overcollected; it is part of the work of our civil and administrative law practice.
Can they auction my home over a few hundred euros of IBI?
They can, the law allows it and the family home has no special protection against the local treasury, unlike the salary. The useful question is whether they do, and in practice almost never over a single bill.
The road to auction is full of steps the council must complete one by one. The seizure of the property is entered as a preventive entry in the Land Registry (article 170.2), so anyone who searches the property sees it. Then the asset has to be valued, the valuation served on the debtor so that it can be contested, the disposal decision issued and the auction called, nowadays electronically through the Official State Gazette portal (articles 97 and following of the General Collection Regulations). The law prohibits disposal while the assessment is not final (article 172.3), so a live appeal against the bill or against the enforcement halts the auction, though not the seizure. And the proportionality principle makes it hard to justify selling a home over a debt far below its value when there are accounts or salaries to seize.
What the council does with a small IBI debt is register the seizure and wait, because the property is charged with payment of the tax (article 64 of the consolidated Act) and sooner or later it is sold, inherited or mortgaged, and at that moment the debt pays itself. When there are no assets and no income, the debt is provisionally declared uncollectible (article 173.1) and is revived if, within the four years, the debtor again has something that can be seized.
Selling or mortgaging with a seizure entry registered is possible in theory. The entry does not prevent a sale and the buyer takes the property with the charge, which he can deduct from the price; the usual course is for the notary to require its cancellation by paying the debt at the same time. No bank will grant a mortgage over a property with a live seizure entry. And even without an entry, article 64 makes the buyer liable, with the property itself and on a subsidiary basis, for the unprescribed IBI owed by the seller, which is why the notary asks for the latest receipt and warns of outstanding debts in the deed. Whoever buys must request the certificate of debts from the council before signing, not rely on the receipt the seller shows.
Deferring or splitting the bill, and when it actually helps
Deferral and payment by instalments (article 65) exist both in the voluntary period and in enforcement, and each council’s tax by-law fixes up to what amount they are granted without security and in how many instalments. The moment you ask decides what you save. Requested within the voluntary period, it prevents enforcement from starting (article 161.2), so there is no surcharge of any kind and only interest is paid for the deferred time. Requested in enforcement but before the order, it does not avoid the 5 % already accrued. Requested after the order, it can be sought until the disposal decision for the seized assets is served (article 65.5), but the 10 % or 20 % already generated stays and is deferred with the debt; what you gain is a halt to the seizure while the request is processed and honoured. A deferral interrupts prescription, and if an instalment is missed the whole balance becomes due at once.
Many councils also offer a payment plan that direct-debits the IBI in several instalments through the year with no interest and no surcharge, and for anyone with a cash-flow squeeze that is the cheap option, provided it is requested before the voluntary period closes.
Who pays the IBI, and what happens in an inheritance, a divorce or a co-ownership when the other party does not pay
The IBI taxpayer is whoever holds the right on 1 January (articles 63 and 75 of the consolidated Act), in a legal order. The concession holder pays if there is an administrative concession, the surface-right holder if there is a surface right, the usufructuary if there is a usufruct, and the owner in all other cases. An inherited flat subject to a widow’s usufruct is paid for by the widow and not by the children who hold the bare ownership, even if the Cadastre is out of date; and whoever sells on 2 January pays the whole year, although the Supreme Court accepts that the seller may pass the proportional share on to the buyer unless agreed otherwise. The tenant is not a taxpayer. The council can only claim from the owner, and the owner can only pass the IBI on to the tenant if the lease says so (article 63.2 of the consolidated Act and article 20 of the Urban Leases Act). If the landlord does not pay, the tenant does not suffer the seizure, but a landlord’s IBI debt rarely comes alone.
While an inheritance has been neither accepted nor divided, the IBI is owed by the unsettled estate (article 35.4 of the General Tax Act), and the council keeps issuing the bill in the name of the deceased or of “the heirs of”. The bills do not die with the owner, they pass to the heirs with the rest of the debts, and the property answers for them through the real charge. Any heir may pay them to avoid the surcharge and then claim the others’ shares, or the estate pays them on division. In Galicia, where the property was handed over during the owner’s lifetime by apartación or pacto de mejora, the recipient is the owner from the deed and pays the IBI from the following 1 January; I explain it in the post on apartación and inheritance during lifetime. Anyone who inherits and does not want to take on debts has acceptance with benefit of inventory, and at the firm we handle the estate together with the settlement of the arrears and the cadastral update that later prevents seizures.
In a co-ownership, whether by inheritance, joint purchase or an unliquidated divorce, the co-owners recorded in the Cadastre are jointly and severally liable for the tax in proportion to their shares, and if they are not recorded, in equal shares (article 64.2 of the consolidated Act). In practice the council issues a bill in the name of one and demands the total from him. That co-owner can ask for the assessment to be divided by supplying the identity, address and share of the others (article 35.7 of the General Tax Act), and from then on each receives his own bill and answers only for his part. If he pays the total, he has a civil action against the others for each one’s share (articles 393 and 395 of the Civil Code). In a divorce, the agreement that assigns the IBI to the spouse who keeps the home binds the spouses between themselves, not the council; if that spouse does not pay, the bill is enforced against the cadastral owner, who may be the other spouse, and the surcharge is borne by whoever paid it until it is recovered under the agreement.
Road tax, the car you sold and the transfer Tráfico will block
The tax on motor vehicles is paid by whoever appears as owner on the registration document on 1 January (articles 94 and 96 of the consolidated Act), to the council of the address shown on that document. If you sold the car and the buyer never completed the transfer, the bill stays in your name, and the only way out is to report the sale to Tráfico with the contract or to deregister the vehicle. On permanent deregistration and on temporary deregistration for theft, the tax is prorated by quarters (article 96.3).
Non-payment follows the same path as the IBI, with surcharges and seizure of account and salary. What is specific is article 99, which prevents the Provincial Traffic Offices from processing a change of ownership until payment of the previous year’s tax is proven; selling or deregistering a car with the tax unpaid becomes impossible until it is settled. There is no real charge as with the IBI, so a buyer who manages to transfer does not answer for the seller’s old bills, and the MOT inspection is not blocked by tax debts. The vehicle itself can be seized, the seizure is entered in the Movable Property Registry and reported to Tráfico, and the council can order it sealed and impounded, although over an annual bill the normal course is to go to the account first.
The council fine, the 50 % discount and what you give up by paying it
A parking or driving fine on an urban road is imposed by the council, which holds the power to sanction on the roads it owns (article 7 of the Road Traffic Act, Royal Legislative Decree 6/2015). The slip on the windscreen is not the notification; the complaint is served at the address held by Tráfico, or at the Dirección Electrónica Vial if you have one, and when that fails, through the Traffic Penalties Public Notice Board, taking effect twenty calendar days after publication (articles 90 and following).
Paying within twenty calendar days of service halves the fine (article 94), but that payment has a price. It means waiving submissions, the procedure ends without an express decision, the penalty becomes final on the day of payment and only judicial review remains; if the offence carried points, they are lost all the same. A 200-euro fine, the ordinary amount for a serious offence, becomes 100 if paid in time and, if neither paid nor appealed, becomes final, enters enforcement and ends up at 240 plus interest and costs.
If you do not pay within those twenty days, you can make submissions within the same period (article 95) and, against the penalty decision, lodge an application for reconsideration within one month, optional here (article 96), or go straight to court. The defences that work are those of form, irregular service, failure to identify the vehicle or the provision infringed, the three-month prescription of a minor offence and the lapse of the file after a year, together with those on the merits when the sign was not there or the officer cannot substantiate the complaint. Once the penalty is final, the voluntary payment period is fifteen calendar days (article 110), and from there on everything is General Tax Act. An unpaid fine does not block renewal of your driving licence or transfer of the vehicle, the tax does that; what does happen is that the same seizure file gathers the fine together with the IBI and the car tax, and the account is held for the total.
Frequently asked questions
What happens if I do not pay the IBI on my home?
The day after the voluntary period closes, the debt enters enforcement with a 5 % surcharge, which rises to 10 % with the enforcement order and to 20 % plus interest if you do not pay within that deadline either. The council seizes your bank accounts and salary first, and the home is entered as seized in the Land Registry, although an auction over a single bill is exceptional.
What happens if I do not pay the IBI on time?
If you pay after the deadline but before receiving the enforcement order, only a 5 % surcharge is added, with no interest. It is worth doing before the order reaches you, because with it the surcharge rises to 10 % and, once its deadline runs out, to 20 % with late-payment interest from the close of the voluntary period. There is no penalty and no record of any kind.
What happens if I do not pay the IBI on an inherited property?
The debt does not disappear with the death, it is owed by the unsettled estate and passes to the heirs on acceptance, with the property answering for it under the real charge in article 64 of the Local Finance Act. Any heir can pay it to avoid the surcharge and claim the others’ shares, and anyone who does not want to take on debts can accept with benefit of inventory.
What happens if I do not pay the IBI within the voluntary period?
The enforcement period starts the next day, without warning, and from that moment the bill carries a 5 % surcharge that rises to 10 % and to 20 % depending on when you pay. A deferral requested before the voluntary period closes avoids any surcharge; requested afterwards, the surcharge already accrued stays. The council does not penalise non-payment, it surcharges it.
What happens if I do not pay the IBI for a year?
Within a year the normal course is to have received the enforcement order and, if it was not paid within its deadline, a hold on the bank account for the bill with the 20 %, interest and costs. The following year’s bill is added to the file, and the four-year prescription is nowhere near, because every valid notification interrupts it and restarts the clock.
Can I challenge the enforcement order, and on exactly which grounds?
Yes, by application for reconsideration within one month, and only on the grounds in article 167.3 of the General Tax Act, which are extinction or prescription of the debt, a deferral requested in the voluntary period or another cause of suspension, failure to notify the assessment, its annulment, and an error in the order that prevents identifying the debtor or the debt. The ones that succeed are prescription and service.
The next step, and who should take it
It depends on the stage. If you have the enforcement order in your hand, the article 62.5 deadline and the month for the appeal both run from the date on the delivery receipt, and the choice between paying with the 10 % and appealing on prescription or service has to be made before the first of them expires; that is a decision for a lawyer with the file in front of him, not for the collection office. If your account or salary has already been held, what gets reviewed is whether the seizure respects the legal limits and whether the chain of notifications holds up, and whatever was overcollected is claimed back. At the firm we handle these matters within our civil and administrative law practice; you can write to us through the contact page or call +34 677 841 007, and we reply as soon as we can.