The Spanish Supreme Court has settled who pays the IBI and the waste fee in a tenancy. And the issue remains very much alive: after Act 7/2022 made the waste fee compulsory across the board, in 2026 the courts have begun to annul poorly processed municipal ordinances. We explain, clearly and with both feet on the ground, who pays each item, when it can be passed on to the tenant, and what it means that some fees are now being struck down.
The question of who bears the IBI (property tax) and the waste fee in a rental sounds simple, but it has produced years of contradictory rulings and no shortage of litigation. The recent Supreme Court Judgment 1637/2025, of 17 November, has at last unified the criterion. It is worth understanding properly, because a single clause in the contract can decide whether the landlord recovers several hundred euros a year — or cannot claim anything at all.
1. Who is liable to pay under the law?
Before discussing agreements, we must identify who is liable vis-à-vis the public authorities.
The IBI (Impuesto sobre Bienes Inmuebles, the local property tax) is a tax whose taxpayer is the owner of the property (Articles 61 and 63 of the Consolidated Text of the Local Tax Authorities Act —TRLRHL—, approved by Royal Legislative Decree 2/2004, of 5 March). The law, however, expressly grants the landlord the right to pass on that amount to the tenant.
The waste collection fee (the “rubbish fee”) works differently: its real beneficiary is the occupier of the dwelling, and the owner acts as a substitute taxpayer (Article 23 TRLRHL), with the corresponding right to pass the fee on to whoever actually uses the service.
In both cases the conclusion is the same: passing the cost on to the tenant is possible, but not automatic. It requires an agreement. And that is where the problems began.
2. The rule in Article 20.1 LAU and why it caused conflict
Article 20.1 of Act 29/1994, of 24 November, on Urban Tenancies (LAU), allows the parties to agree that the tenant will assume the property’s general expenses. But it imposes a safeguard: where the expenses are not capable of individualisation, for the agreement to be valid it must be in writing and must state the annual amount of those expenses as at the date of the contract.
The purpose of the rule is to protect the tenant: to prevent the rent from being increased through expenses without the tenant knowing in advance how much they are taking on.
The conflict arose when asking whether the IBI and the waste fee fell within that requirement. Some Provincial Courts struck down pass-on clauses where the contract did not state the annual IBI figure; others upheld them on the basis of the agreement alone. The result was legal uncertainty for both parties.
3. The Supreme Court’s doctrine: Judgment 1637/2025
The Supreme Court Judgment (First Chamber) 1637/2025, of 17 November 2025 (cassation appeal 9557/2024; ECLI:ES:TS:2025:5076) brings order. The facts were typical: a contract requiring the tenant to pay the IBI, the community charges and the waste fees; the tenant paid for one year, stopped paying the next, and argued the clause was void because it did not state the annual amount.
The Supreme Court rejects that argument and lays down doctrine with a key distinction:
3.1. Individualisable versus non-individualisable expenses
Article 20.1 LAU — the Court reasons — only requires the annual amount to be stated for expenses that are not capable of individualisation, that is, those relating to the property as a whole (general community charges, insurance, common services). Because such expenses cannot be precisely assigned to a specific dwelling, the law requires their amount to be specified so that the tenant knows the scope of what they are assuming.
The IBI and the waste fee, by contrast, are individualised for the rented dwelling: the bill is issued by the authorities with an amount already determined and referring to that property. Being individualised, they are not subject to the annual-amount requirement.
3.2. What is then needed to pass them on
An express, written agreement in the contract assigning those taxes to the tenant is enough. There is no need to state the exact amount. A clause such as “the IBI and the waste fee shall be borne by the tenant” is valid and fully enforceable.
3.3. Non-payment opens the door to eviction
The judgment also confirms a weighty consequence: where these taxes have been validly agreed, they count as sums treated as rent. Failure to pay them can ground termination of the contract and eviction of the tenant, under Article 27.2 LAU. In the case decided, the Supreme Court upheld both the termination of the contract and the order to pay the outstanding bills.
4. The compulsory waste fee: where it comes from and why it has risen
It is worth placing the waste fee in context, because it is not a 2026 novelty. Its compulsory nature stems from Act 7/2022, of 8 April, on waste and contaminated soils for a circular economy, whose Article 11.3 gave local authorities a deadline —which expired on 10 April 2025— to establish a waste fee that is specific, differentiated and non-deficitary, reflecting the real cost of the service.
The effects were felt mainly throughout 2025: the fee ceased to be optional and became compulsory in municipalities, it can no longer be funded out of other revenue and, because it must cover the real cost, it rose significantly or appeared where it did not exist before (the average national household fee was around €116 in 2025). In 2026 most councils already apply it, with adjustments —such as Madrid’s— and the option to direct-debit and pay it in instalments.
5. The 2026 development: courts begin to annul poorly processed waste fees
What is genuinely new this year is not the fee itself, but that the courts have begun to annul it where councils have not processed or justified it correctly.
The most relevant case: the Ninth Section of the Administrative Chamber of the High Court of Justice of Madrid (TSJ), in a judgment of March 2026 (ECLI:ES:TSJM:2026:2149), declared the full nullity of Madrid City Council’s waste fee (Fiscal Ordinance 8/2024).
The reason? During the public consultation stage, an essential part of the technical-economic report was omitted —specifically, the annexes of the study on waste generation by economic activity—, which prevented citizens from knowing and scrutinising how the fee had been calculated. The Court recalls that this report cannot be limited to figures: it must explain the methodology, so that it can be verified that the fee respects the principles of legality, proportionality and equivalence, and the “polluter pays” principle of Act 7/2022. The failure to publish that documentation caused a lack of due process and, therefore, nullity.
Two important caveats, with both feet on the ground:
- The judgment is open to a cassation appeal, so it is not final.
- Despite the annulment, councils continue to issue the bills until the matter is definitively resolved; the fact that an ordinance is struck down does not mean you can stop paying today without consequences.
Madrid is not an isolated case: similar challenges have been brought in other municipalities over defects in the economic report or because the fee was calculated using criteria with little connection to the real generation of waste. If you believe your fee may be wrongly calculated, it is wise to review the ordinance and, above all, the deadlines to appeal before they lapse.
Practical cases
Case 1. Clause without a figure. The contract states: “The tenant shall pay the IBI and the waste fee.” No amount is given. After Judgment 1637/2025, the agreement is valid and enforceable: the landlord can claim those bills and, if unpaid, seek eviction.
Case 2. Contract is silent. The contract says nothing about the IBI or the waste fee. The landlord cannot pass them on: absent an agreement, both taxes fall to the owner. It is worth reviewing the contract before each renewal; we also cover this in our analysis of the repeal of the extraordinary rental extension (RDL 8/2026).
Case 3. Non-individualised community charges. If what you want to pass on are the community’s general charges, it remains essential to state their annual amount as at the date of the contract (Art. 20.1 LAU). The Supreme Court’s doctrine does not exempt non-individualisable expenses from this requirement.
Case 4. The tenant stops paying the waste fee. Validly agreed, the fee is a sum treated as rent. Persistent non-payment allows the landlord to terminate the contract and evict, as well as to claim what is owed.
Case 5. A passed-on fee that is later annulled. If the tenant pays, under a valid agreement, a waste fee that is later declared void and refunded by the council, the refund belongs to whoever bore it —the tenant—, not the landlord. It is worth anticipating this in the contract to avoid disputes.
Summary: the key points
- The IBI is paid by the owner vis-à-vis the authorities, but the law allows it to be passed on to the tenant if agreed.
- The waste fee is passed on by the owner as substitute taxpayer; the beneficiary is the occupier.
- Judgment 1637/2025 clarifies that the IBI and the waste fee are individualised expenses: an express written agreement is enough, with no need to state the annual amount.
- Non-individualised community charges do require their annual amount to be stated (Art. 20.1 LAU).
- Non-payment of these validly agreed taxes can lead to eviction (Art. 27.2 LAU).
- The compulsory waste fee comes from Act 7/2022 (deadline April 2025), it is not new in 2026; what is new in 2026 is that courts have begun to annul poorly processed ordinances (e.g. the TSJ of Madrid) — rulings that can still be appealed and that, for now, do not exempt anyone from paying.
Do you need advice on your rental expenses?
The difference between being able to claim the IBI and the waste fee, or having to absorb them, often comes down to a single line in the contract. At Quikprokuo we review and draft tenancy agreements with clear, enforceable clauses, we assess whether your waste fee can be challenged, and we act for you whether you are a landlord or a tenant. If you have a live contract, a doubtful clause or a bill to claim, contact our firm and we will analyse it rigorously.
This article is for general information only and does not constitute legal advice for a specific case. For a tailored assessment, please consult a lawyer.
