🧱 What is the ICIO (Impuesto sobre Construcciones, Instalaciones y Obras)?

The Impuesto sobre Construcciones, Instalaciones y Obras — commonly known as ICIO — is a local municipal tax in Spain that applies to construction, installation and works carried out within a municipality when a licence is required. It is a municipal tax, meaning each town or city council (ayuntamiento) sets and administers it. The ICIO is:

Not a national tax managed by the Spanish Tax Agency, but a local tax set by each municipality; and

Potestative (optional) — it only applies if the local council has adopted a specific ordinance to charge it.

In broad terms:

✔ It taxes the act of carrying out construction work, installation work or other building works that are subject to a municipal licence or similar administrative control.

✔ It is payable even if the relevant licence has not yet been obtained — because the tax is linked to the initiation of work.

✔ The tax base is the real and effective cost of the works, and the tax rate is applied as a percentage of that cost.

The liable person(s) (“sujetos pasivos”) are:

The owner of the construction, installation or works — i.e. the person who bears the actual cost of the works; and

In some cases, if someone else undertakes the works, the person carrying out or applying for the licence may be considered jointly liable under local law.

This applies whether the owner is a natural person, company or legal entity.

The ICIO becomes due when:

Construction work, installation work, or other building works begin; and

Such works require a municipal works licence, urban planning licence, or submission of a declaration responsible / prior notice.

Typical examples include:

New building construction

Extensions and renovations

Infrastructure works

Exterior alterations to buildings

Installation of equipment or systems that require a licence

The key principle is any project that requires municipal authorisation or control is potentially subject to ICIO.

Base Imponible (Tax Base)

The base of the tax is the actual cost of the construction, installation or works, excluding:

VAT (IVA) and other similar taxes

Professional fees (architects, engineers, project managers)

Contractor’s business profit

Other indirect or unrelated expenses

This is normally the cost of execution material.

Tax Rate (Tipo de Gravamen)

Unlike national taxes, the ICIO rate is set locally by each municipality within certain legal limits stipulated by Spanish law (it cannot exceed 4% and, in most cases, cannot be less than 2%).

For example:

📌 Málaga city (from the municipal ICIO Ordinance) sets a 2% rate on the tax base.

📌 Larger Andalusian cities under common tax regime have varied rates; for 2024 figures (indicative) Málaga’s was ~3.80%, Sevilla ~3.22%, Almería and Cádiz 4%, Córdoba 3.30% (rates set by municipal ordinances).

⚠️ Important: Actual rates depend on the local ordinance in force at the time of your works. Always check with the specific town/city council (ayuntamiento).

The ICIO is generally due at the moment the works begin, even if the licence has not yet been formally issued. Municipalities typically require:

A provisional self-assessment of the tax at the start of works; and

A definitive declaration of the actual cost once works are complete.

The tax is usually submitted and paid within a fixed period after notification by the town hall (often within 30 working days), but this can vary locally.

Because ICIO is administered locally, procedures differ. Generally:

Submit the self-assessment or declaration to the municipal tax office (commonly via the council’s electronic tax portal).

Declare (and in some cases pay a deposit on) the tax based on your budget.

After completion, file a final cost declaration showing the actual cost (which may adjust the tax due).

Pay any balance owing (or receive a refund if the initial deposit was too high).

Keep all supporting documentation (contracts, invoices, budgets) in case the council requests verification.

Many municipalities allow online submissions using Spain’s electronic signature system (e.g., digital certificate, Cl@ve).

Although the base law sets the framework, bonifications (tax reductions) and exemptions are set by each local authority. Examples of common cases include:

🔹 Basic Exemptions

Some councils exempt:

Works executed directly by public authorities for public infrastructure (roads, railways, ports, water/sewer works).

National rules also specify limited exemptions (e.g., certain state or church works), but these are rare in private developments.

🔹 Bonifications (Reductions)

Councils can offer up to 95% reductions for:

✅ Works considered of special municipal interest or utility (e.g., cultural heritage, historical preservation, revitalisation).

✅ Installation of renewable energy equipment (e.g., solar energy systems).

✅ Works improving accessibility for disabled persons.

✅ Promotion of employment or economic activity (specific local ordinances).

Sevilla city, for example, updated its municipal tax ordinance to expand bonifications in ICIO — including removing certain restrictions for accessibility works and raising bonifications up to the maximum permitted (95%) for targeted restoration projects (e.g., historic pavilions).

Important: These bonifications are municipal — so their availability, requirements and thresholds depend on the town or city applying them.

Disclaimer:

The information provided in this guide on the Impuesto sobre Construcciones, Instalaciones y Obras (ICIO) in Andalucía is for general informational purposes only and does not constitute legal, tax, or professional advice. While every effort has been made to ensure accuracy, municipal regulations, tax rates, and procedures may change and can vary between different local councils.

Before undertaking any construction, installation, or building works, it is strongly recommended to consult:

• A qualified tax advisor or gestor familiar with local municipal taxes,

• The relevant municipal office (ayuntamiento) where the property is located, and

• Any legal professional if needed to ensure full compliance with local regulations.

Neither the author nor any associated party accepts responsibility or liability for any errors, omissions, or outcomes arising from the use of this guide.