Full Council approves the amendments to the new tax by-laws

The changes to the tax by-laws made their way past the final administrative step with broad political agreement. The new by-laws mainly seek to tackle the climate emergency and establish a fairer system for the intensive use of public space for economic activity. The changes are expected to raise 66 million euros in total.

20/12/2019 15:01 h

Ajuntament de Barcelona

The amendments were approved with votes from Barcelona en Comú, the PSC and ERC, with Junts per Catalunya abstaining and Cs, the PP and Barcelona pel canvi all voting against them.

The by-laws to be amended for 2020 and successive years are:

Property Tax (IBI)

The Property Tax (IBI) is being updated in line with the new cadastral values from the revision made in 2017. A drop is anticipated in the rate from 0.75% to 0.66%, with ceilings also to be eliminated. This combination means an average rise of 5.46% (below the average for the 2008-2015 period, which was 6.5%).

There will also be an increase of 50% in the IBI payable for residential homes which are permanently unoccupied, based on the regulations from Royal Decree Law 7/2019.

Discount for direct debit payment will also be eliminated and the IBI associated to buildings with special characteristics (BICES) increased. The latter is used to tax activities at the port and the gas plant.

Tax on terraces in public space

The tax on terraces in public space will finally be increased by 66%, a third less than the increase initially put forward in the full council meeting of October. The rise will put this tax on a par with cities such as Venice, Rome, Milan and Naples.

The proposal sets out a new zonal classification for streets, aligned with the current economic reality in the city and doing away with the current tax categories based on street sections.

The tax can be paid in quarterly instalments if requested in 2020 and will be processed automatically by direct debit in 2021.

Sewerage tax

The proposal includes an increase to sewerage tariffs to cover the cost of the service better. This tax will rise from 33% to 75%, meaning an average bill will go up from the current 15 euros a year to 24 euros. Exemptions for people suffering energy poverty, approved during the last term of office, will remain in place.

Tax for initiating economic activity

The tax on starting economic activity now disappears to help new self-employed professionals and companies get going and to promote entrepreneurialism. Specifically, this is the abolition of a tax linked to the verification and control of activities subject to a communication or declaration of responsibility, essential for starting a business. The elimination of this tax was also a recommendation by the World Bank.

Tax on vehicles

A reformulation will also be applied to the way road tax (IVTM) is calculated for cars and motorbikes, with changes to existing tax discounts for vehicles that pollute the least: zero-emissions vehicles will keep their 75% discounts, while discounts for vehicles with ECO badges will be cut from 75% to 50%.

Discounts for petrol-driven cars of up to 120 g/km de CO2 will get not discounts. Neither will vehicles over 25 years old which haven’t got the historical registration plates issued by the DGT.

Municipal tow-truck

Tax for the retrieval of vehicles removed by the municipal tow-truck will go up by 17%, in line with inflation in Catalonia since 2009. This means the cost of recovering a car will rise from the current amount of 147,69 euros to 173 euros, covering 95% of the cost of the service instead of the current 76,96%.

Additional increases of 10% are anticipated to combat indiscipline and free up pavements and pedestrian areas.

Discount for making use of solar energy

The discount for making use of solar energy is being increased and extended to non-residential buildings to foster renewable energy.

Building tax

The proposal strengthens the tax on construction, installations and works (ICIO) with the base rate rising from 3,35% to the legal maximum of 4%, in line with cities such as Madrid, Zaragoza, Girona, Sant Adrià del Besòs, Badalona, L’Hospitalet de Llobregat and Sant Cugat del Vallès.

Green and blue parking areas still to be resolved

Finally, the vote on by-laws relating to on-street parking in green and blue zones has been put off until early in 2020, responding to the demand from the ERC group.