In Spain, anyone who decides to start a construction project faces two mandatory concepts: ICIO and a work permit. These terms are often confused, even though in practice they regulate completely different aspects of the process. A misunderstanding can result not only in fines but also in the indefinite suspension of a project. In 2025, the requirements for documentation became even stricter, and municipalities have tightened control over compliance.
Many believe that paying just one of these fees is enough to freely begin construction. However, Spanish law clearly separates tax and administrative obligations. ICIO is not just another payment—it’s a specific tax charged for the very fact of performing construction work. The permit, on the other hand, is an authorization without which any work on the site is considered illegal.
Two concepts — two separate obligations
ICIO (Impuesto sobre Construcciones, Instalaciones y Obras) is a municipal tax imposed on property owners for carrying out construction, installation, or renovation work. The amount depends on the project’s value and is set by local authorities. Funds collected from this tax are used to improve urban infrastructure and cover urbanization-related expenses.
A building license is an administrative permit issued by the municipality. Without this document, any construction work is considered unauthorized, and those responsible risk not only fines but also an order to demolish illegal structures. To obtain the license, detailed project documentation must be submitted and the required fees and charges paid.
Why just one document is not enough
Paying the ICIO does not exempt you from the need to obtain a permit. Even if the tax has already been paid, without the permit, any work is still illegal. Likewise, having a license does not relieve you of the obligation to pay the ICIO. Municipalities conduct regular inspections and, if violations are found, can suspend construction until all requirements are met.
In some cases, property owners mistakenly believe that simply obtaining a license exempts them from tax responsibilities. In reality, this can lead to double penalties: for failing to pay the ICIO and for administrative violations. In 2025, the number of such cases increased, especially in major cities where enforcement has become particularly strict.
Who is exempt from paying the ICIO
There are certain categories exempted from the general rule. For example, government institutions and projects commissioned by the administration are not required to pay ICIO. The Catholic Church is also exempt from this tax, as established at the national level. However, these exemptions do not cover the licensing process — a building permit is required in any case.
In addition to mandatory benefits, each municipality has the right to establish additional reliefs. In some cities, there are temporary discounts for specific types of work or for projects related to energy efficiency. Information about such opportunities is available only from the local administration, as the list of benefits is updated regularly.
Documentation and key requirements
To obtain a permit, you’ll need to gather a substantial set of documents: the architectural design, technical reports, and approvals from utility companies. Depending on the type of work, the list may vary. After submitting the application, the municipality reviews it over several weeks, sometimes even months.
ICIO is calculated based on the cost estimate provided by the applicant. If discrepancies are found between the declared and actual cost of the work, the tax may be reassessed. Some municipalities require payment of ICIO before work begins, while others allow payment after the permit is issued.
Liability for violations and current trends
In recent years, Spanish authorities have tightened control over compliance with building regulations. Significant fines are imposed for the absence of a license or non-payment of ICIO, and in some cases—suspension or even demolition of illegal constructions. In 2025, the number of inspections increased, especially in tourist regions and major cities.
Property owners are advised to consult with lawyers and real estate experts in advance to avoid unpleasant surprises. It’s important to remember that even minor works—such as apartment remodeling or installing an air conditioner—may require proper documentation and tax payments.
If you weren’t aware, ICIO is one of the key municipal taxes in Spain, introduced in the late twentieth century. Its implementation was aimed at financing urban projects and maintaining infrastructure. The construction license, in turn, is regulated by local laws and is mandatory for all types of work affecting a building’s structure or facade. In recent years, documentation requirements have become stricter and oversight more rigorous. RUSSPAIN.COM regularly publishes up-to-date explanations on real estate and legal issues in Spain.
