Madrid, December 22 – The Plenary Session of the Madrid City Council approved this Monday the tax ordinances for 2026. These new regulations introduce a 0.414% reduction in the Property Tax (IBI), modify the criteria for applying Vehicle Tax (IVTM) bonuses to align with environmental labels, and adjust the waste fee calculation to consider the number of registered residents in residential properties.
Key Changes in the 2026 Tax Ordinances
The approval of these ordinances marks a significant step in the city’s fiscal policy, aiming to balance economic needs with environmental concerns and social equity. The most notable changes are:
1. IBI Reduction: A 0.414% Decrease
The Property Tax (IBI) will see a reduction of 0.414%. This move is expected to provide some financial relief to property owners across the city. The IBI is a crucial municipal tax, and any adjustment has a broad impact on residents and businesses.
2. IVTM Modifications: Environmental Labels as a Criterion
The criteria for applying bonuses on the Vehicle Tax (IVTM) will now be based on environmental labels. This change reflects the city’s commitment to promoting more sustainable transportation options and incentivizing the use of less polluting vehicles. Vehicles with higher environmental ratings are likely to benefit from more favorable tax conditions.
3. Waste Fee Adjustment: Number of Residents as a Variable
The waste fee calculation for residential properties will be modified to include the variable of the number of registered residents in a dwelling. This adjustment aims to create a more equitable system, where households with more occupants, potentially generating more waste, contribute proportionally to waste management costs.
Impact and Rationale Behind the Changes
These fiscal adjustments are part of a broader strategy by the Madrid City Council to adapt its tax structure to current economic realities and future sustainability goals. The reduction in IBI could stimulate local spending and support property owners, while the IVTM changes align with ongoing efforts to combat climate change and improve air quality in the city.
The modification of the waste fee, by considering the number of residents, addresses concerns about fairness and resource allocation in waste management. It encourages a more responsible approach to waste generation at the household level.
Looking Ahead to 2026
The approved ordinances will come into effect in 2026. The City Council anticipates that these changes will contribute to a more just and sustainable urban environment. Further details regarding the implementation and specific impacts on different segments of the population are expected to be released as the effective date approaches.
The decision was made during a plenary session held on Monday, December 22, 2025, following extensive deliberations and proposals.
