Rewritten: Understanding IBI and Cost Allocation in Rental Properties

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Theme expenses arising from rent of a house has raised many questions since its publication. Housing Law at the BOE on May 24 has left both tenants and owners wondering how this new regulation will affect them, and especially who is responsible for paying Property Tax (IBI) in a rental home.

First, it should be clarified that IBI is an annual, compulsory tax payable at the town hall. It corresponds to the municipality where the house is located. This tax targets ownership of any rights in urban, rural, or special real estate. In calculating the amount due, the cadastral value of the property is taken into account, and a percentage set by central administration is applied to each property type within the limits established by the municipal council.

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In cases of IBI payment for a rental property, it is possible for both the landlord and the tenant to negotiate who bears this tax and even to share the cost. The key is that the lease clearly states this responsibility, including the exact amount of the IBI. If the contract does not specify who pays the IBI, the landlord generally becomes the responsible party.

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Distribution of other expenses in the lease agreement

Beyond IBI, other costs should be considered in the rental contract. While there is no single formula, authorities and consumer groups often recommend a cost-sharing model that is commonly used in rental agreements. This approach helps clarify who pays for utilities and services and avoids disputes later.

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Owners are typically responsible for IBI related expenses, neighborhood association dues, insurance, and garbage collection fees. This distribution can vary by jurisdiction and by what the lease contract specifies, so it is important for both parties to review these items carefully before signing.

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On the other hand, tenants may be responsible for payment of individually metered utilities such as electricity, water, gas, and internet. It is essential to confirm who covers each service in the lease, and to ensure the arrangement is documented clearly to prevent misunderstandings.

It is important to pay attention to these distributions, as they may vary depending on what is agreed between the parties in the lease. Therefore, both landlords and tenants should carefully review the contract and secure a written agreement on how costs are distributed.

In conclusion, the payment of IBI in a rental property can be negotiated between the landlord and the tenant within the rental agreement. If this is not expressly agreed, the owner will typically assume responsibility. It is also essential to consider the allocation of other costs in the contract to prevent disputes and to foster a fair and transparent relationship between both parties. [Citation]

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