Madrid cuts its IBI property tax to the 0.4% legal minimum from 2027
Madrid's IBI property tax will fall to 0.4% in 2027, the lowest rate Spanish law allows, which leaves no room for further cuts. Mayor José Luis Martínez-Almeida made the announcement after the city's governing board approved the 2027 fiscal ordinances.
Madrid sets the rate at the legal floor
Madrid will lower its Impuesto sobre Bienes Inmuebles (IBI), the municipal property tax, to 0.4% for 2027, the lowest rate Spanish law allows. Mayor José Luis Martínez-Almeida (PP) announced the decision on Thursday, 15 October 2026, at a press conference held after the city's Junta de Gobierno, its governing board, approved the proposed fiscal ordinances. The mayor said the change marks the first time the rate has reached the minimum in the city's history. The cut still needs approval from the full city council, which El País expects to pass given the PP's absolute majority. Madrid's rate currently stands at 0.414%.
Savings and the legal limit
The mayor put the cumulative saving for residents at 245 million euros, a figure El País says is calculated from 2019, when the cuts began. El País reports the saving for 2027 alone at 31 million euros, so the two figures measure different periods. The limit comes from the Ley reguladora de Haciendas Locales, which sets the floor at 0.4% of cadastral value, and the mayor said no further reduction is possible.
We would like to keep lowering it, but it is impossible. We can no longer lower it.
Only Santander and Zaragoza already have the minimum rate in Spain, according to the mayor. The same ordinances include the refuse collection fee (tasa de basuras), whose service cost rises by 7 million euros this year, and the city says the impact on residents will be minimal.
How Madrid compares
El País gives the national average IBI rate as 0.6%, with Barcelona and Seville at 0.66% and Valencia at 0.57%. Almeida said Madrid's rate would sit 50% below the national average once the cut takes effect. The comparison is shown below.
- Madrid (current)
- 0.414 %
- Madrid (2027)
- 0.4 %
- Spain average
- 0.6 %
- Valencia
- 0.57 %
- Barcelona
- 0.66 %
El País also cited an example from finance delegate Engracia Hidalgo: a home in the Pilar district with a cadastral value of 135,000 euros pays 540 euros this year and would otherwise pay 689 euros. The tax is calculated on cadastral value, which the Dirección General del Catastro, part of the Ministry of Finance, sets independently.
Reactions and what comes next
eldiario.es reports that the savings mostly benefit owners of the most expensive homes, because higher cadastral values produce larger discounts. The mayor framed the decision as a milestone for the council's tax policy.
This is the most important agreement we have adopted on the tax ordinances over the last seven years.
The full city council must still approve the rate cut in plenary before it applies to the 2027 tax year.
