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Utility costs when renting in Spain: Who pays IBI, rubbish collection and Comunidad

Responsible for this content: Frank Menze

Ancillary costs for rented flats in Spain work fundamentally differently from what many German-speaking tenants and landlords expect after years of habit. There is no German Betriebskostenverordnung (operating costs ordinance), no statutory list of apportionable costs, and no obligation to produce an annual statement with a balancing payment or credit. Instead, Article 20 of the Ley de Arrendamientos Urbanos (LAU) sets out a much simpler — but also much more frequently misunderstood — basic rule: general costs that cannot be individualised are, in principle, borne by the landlord — unless there is a written clause specifying a fixed annual amount. This guide explains who actually pays IBI, the rubbish collection fee, community costs and repairs, where the statutory limits lie, and which clause in your tenancy agreement actually holds up.

Additional costs for rental flats in Spain: IBI, rubbish, Comunidad

Does your tenancy agreement contain a valid ancillary-costs clause — or are you currently paying too much?

The misconception: why the German-style utility bill statement doesn't exist in Spain

Anyone moving from Germany to Mallorca often brings along a fixed expectation: there is a monthly advance payment for ancillary costs, at the end of the year a statement based on living space or number of occupants, and depending on consumption, a balancing payment or refund follows. Spanish residential tenancy law knows no such system. The Ley de Arrendamientos Urbanos (LAU) instead distinguishes only between two categories: costs that can be individualised via a separate meter (Art. 20.3), and general costs that cannot (Art. 20.1). For the latter, the basic rule is that the landlord pays — not the tenant. Only an express, written agreement specifying a fixed annual amount reverses this.

Note: This guide covers the classic residential tenancy agreement (arrendamiento de vivienda) under Spanish law — not holiday letting. Details on long-term tenancies can be found in the guide Long-term rental Mallorca.

The relevant provision is Article 20 of Ley 29/1994, de 24 de noviembre, de Arrendamientos Urbanos, as amended by disposición final 1.4 of Ley 12/2023, in force since 26 May 2023. The article sets out in four paragraphs who bears which ancillary costs and how much they may increase.

Paragraph Provision
Art. 20.1 General, non-individualisable costs (maintenance, services, taxes, charges) are borne by the tenant only if there is a written agreement specifying a fixed annual amount at the time the contract is concluded
Art. 20.2 The increase in these costs (excluding taxes) is capped during the first years of the contract
Art. 20.3 Costs for services with their own meter (electricity, water, gas) are borne by the tenant in every case — without any clause being required for this
Art. 20.4 The proof of payment must show the items separately (reference to Art. 17.4 LAU)

Central to this is the wording of Art. 20.1: A clause referring to taxes only has effect between landlord and tenant — it has no effect vis-à-vis the authorities. In concrete terms, this means: even if your tenancy agreement stipulates that you take on the IBI, the owner remains the taxpayer of record as far as the town hall is concerned. The clause merely regulates that the landlord may have the amount reimbursed by you under civil law. You can find out more about calculating the property tax itself in the guide IBI tax Spain.

Who pays what: an overview by cost type

The following table summarises how the statutory allocation under Art. 20 and Art. 21 LAU applies to the typical cost types of a rented flat.

Cost type Who pays according to law Legal basis
IBI (property tax) to the town hall Owner remains liable for the tax; reimbursement from the tenant only with a written clause Art. 20.1 LAU
Waste fee (tasa de residuos), unless individualised Landlord, unless there is a written clause with an annual amount Art. 20.1 LAU
Comunidad costs (owners' association) Landlord, unless there is a written clause with an annual amount Art. 20.1 LAU
Electricity, water, gas with own meter Tenant, always, no clause required Art. 20.3 LAU
Estate agent's commission and contract costs Landlord, always, since 26.05.2023 Art. 20.1 LAU
Minor repairs from ordinary use Tenant Art. 21.4 LAU
Maintenance repairs for habitability landlord, without rent increase Art. 21.1 LAU

Please note: Without a written clause specifying a fixed annual amount, general, non-individualisable costs must, as a rule, be paid by the landlord — not the tenant. Many rental contracts on Mallorca don't even formulate this clause validly, because the annual amount is missing.

The written clause: what is valid and what is not

For an agreement on additional costs under Art. 20.1 to be valid at all, two conditions must be met simultaneously:

  1. The agreement must be made in writing — a verbal arrangement or mere practice is not sufficient.
  2. It must state the annual amount of these costs as a specific figure at the time the contract is concluded — a blanket wording such as "the tenant bears the additional costs" without a concrete figure does not meet this requirement.

If the property is part of a community of owners (régimen de propiedad horizontal), the share of costs is calculated according to the cuota de participación of the rented unit. If there is no community of owners, the size of the flat is decisive. You can read more about how the community of owners itself works in the guide Comunidad de Propietarios Spain.

Note: Gastos de gestión inmobiliaria (agency fees) and the costs of formalising the contract may no longer be passed on to the tenant since the reform of 26.05.2023 — regardless of what the rental contract says. These costs must always be borne by the landlord.

The cap: how much can additional costs increase?

Art. 20.2 LAU limits how much the amount to be paid by the tenant under Art. 20.1 may be increased during the tenancy. During the first five years of the contract term — or seven years if the landlord is a legal entity — this amount, excluding taxes, may only be increased by mutual agreement and never by more than double the amount by which the rent itself could increase under Art. 18.1 LAU.

Period Rule
First 5 years (natural person as landlord) Increase in additional costs (excluding taxes) capped
First 7 years (legal entity as landlord) Same cap, extended period
Exception Taxes are exempt from the cap
Upper limit Never more than double the permitted rent increase under Art. 18.1 LAU

Waste fee: who pays it and why it's currently in flux

The municipal waste fee (tasa de residuos) falls, unless it is individually invoiced directly to the tenant, under the general rule of Art. 20.1: the landlord pays, unless there is a written clause specifying an annual amount. In Mallorca, this fee is currently in flux, because Art. 11.3 of the Ley 7/2022, de residuos y suelos contaminados para una economía circular, obliges municipalities to introduce a specific, non-deficit fee that reflects the real costs of collecting, transporting and treating waste, and that enables cost-based billing systems. This three-year implementation deadline from the law's entry into force expired on 10 April 2025. The obligation therefore applies, and it forces municipalities to revise their Ordenanza fiscal on the waste fee. Whether and to what extent your municipality has changed the fee is stated exclusively in its own Ordenanza fiscal — there is no single figure that applies to the whole of Mallorca.

Note: The specific amount of the waste fee varies by municipality and changes annually via the respective Ordenanza fiscal. Check the current rates directly with your Ayuntamiento. You can find an overview of further municipal charges in the guide Municipal taxes Mallorca.

Repairs: the second source of confusion

Besides the ongoing ancillary costs, the question of who pays for repairs is the second common source of dispute. Art. 21 LAU draws a clear distinction here between two categories:

  • Art. 21.1: The landlord must carry out all repairs necessary to keep the flat in a habitable condition — and may not raise the rent for this. Excluded are damages attributable to the tenant themselves (Art. 1.563 and 1.564 Código Civil).
  • Art. 21.2: If an urgent maintenance measure takes longer than twenty days, the rent must be reduced proportionally, insofar as the tenant is thereby deprived of part of the flat.
  • Art. 21.4: Minor repairs arising from the ordinary use of the flat are borne by the tenant — without any separate contractual clause being necessary for this.

Improvement works during the tenancy

If the landlord wishes to carry out improvement works (obras de mejora) during the ongoing tenancy, a fixed procedure applies under Art. 22.2 LAU:

  1. The landlord must give at least three months' written notice in advance of the nature, start, expected duration and cost of the works.
  2. The tenant can terminate the tenancy agreement within one month of this notification.
  3. If the tenant terminates, the contract ends two months after the termination.
  4. During this two-month period, the works may not begin.
Deadline Meaning
3 months Notice period the landlord must observe in writing before the start
1 month Period for the tenant to give notice after being informed
2 months Period until the contract actually ends after termination
20 days From this duration of an unavoidable repair onwards: proportional rent reduction

Proof requirement: what must be stated on the receipt

According to Art. 20.4 LAU, proof of utility cost payments is governed by Art. 17.4 LAU. This means: the payment receipt must list the individual items separately and state the applicable rent separately. A combined receipt that lumps rent and utility costs together into one total does not meet this requirement. This is particularly relevant for tenants who later want to deduct these costs for tax purposes or document them to the landlord.

Most common mistakes

  • Tenant pays the Comunidad or rubbish collection fee because "that's just how it's done" — without the tenancy agreement containing a valid, written clause with an annual amount.
  • Landlord demands the estate agent's commission from the tenant — impermissible since 26.05.2023, as these costs are always borne by the landlord.
  • Confusing tax liability with civil-law reimbursement — even where cost coverage has been agreed, the owner remains liable to the town hall for the IBI.
  • Expecting an annual statement as in Germany — this does not exist in Spanish residential tenancy law.
  • Clause without a specified annual amount — a blanket wording without a concrete figure is invalid, and the landlord remains liable for payment.
  • Increasing utility costs without regard to the cap — in the first 5 or 7 years of the contract, an upper limit applies under Art. 20.2.

What comes next?

If you're unsure as a tenant or landlord whether an existing clause in your tenancy agreement is valid, it's worth having it legally reviewed before signing — not afterwards. In particular, check whether the annual amount is specifically stated in figures and whether the clause clearly distinguishes between individualisable and non-individualisable costs. You can find more information on notice periods in the guide Terminating a tenancy agreement in Spain, and on contract duration in the guide 11-month tenancy agreement Spain. Anyone wanting to sublet a flat will find additional rules in the guide Subletting Spain.

Checklist: reviewing additional costs in the rental agreement

  • Does the contract explicitly state which costs the tenant covers?
  • Is a specific annual amount stated for these costs?
  • Is the clause set out in writing — not just agreed verbally?
  • Are electricity, water and gas meters individually assigned to the tenant?
  • Does the contract correctly assign the estate agent's commission to the landlord?
  • Do the payment receipts list the items separately?
  • Is it clear whether and by how much the additional costs may rise in the first years of the contract?

Please note: An existing property management company usually knows the exact cost allocation of the Comunidad and can professionally assess the clauses. A directory of property management companies on Mallorca helps with the local search.

Conclusion

The Spanish system for additional rental costs works on a simple but strict basic principle: without a written clause specifying an exact annual amount, the landlord pays the general costs such as the Comunidad fee and rubbish collection charge — only individually metered services such as electricity, water and gas are automatically charged to the tenant. The IBI remains the owner's responsibility towards the town hall regardless of any contract clause, and since 2023 estate agent fees must be borne by the landlord. Anyone who understands this structure can realistically calculate rental contracts on Mallorca, rather than relying on a German-style utility-cost logic that simply doesn't exist under Spanish law.

Official sources

Do I as a tenant automatically have to pay the Comunidad costs?
No. Under Art. 20.1 LAU, the landlord bears general, non-individualisable costs such as the Comunidad, unless there is a written agreement specifying a fixed annual amount.
Who pays the IBI in Spain - tenant or landlord?
The party liable for tax to the town hall always remains the owner. A contract clause can at most regulate a civil-law reimbursement by the tenant, but it does not change the tax liability itself.
May the landlord pass the estate agent's commission on to me as the tenant?
No. Since the reform of 26 May 2023, the landlord always bears the agent's fees and the costs of formalising the contract, regardless of any contractual agreements.
What happens if the rental contract contains no clause on additional costs?
Then the statutory default rule applies: the landlord bears all general, non-individualisable costs such as the Comunidad and the rubbish collection fee in full.
How much are additional costs allowed to rise during the tenancy?
In the first five contract years (seven if the landlord is a legal entity), the increase in these costs - excluding taxes - is capped and may never be more than double the permitted rent increase.
Who pays for minor repairs in the rented flat?
Minor repairs arising from ordinary use are borne by the tenant under Art. 21.4 LAU. Repairs needed to maintain habitability, on the other hand, must be carried out by the landlord without increasing the rent as a result.
Am I entitled to a rent reduction if a repair takes a long time?
Yes, if an unavoidable maintenance measure takes longer than twenty days and as a result part of the flat is unavailable to you, the rent must be reduced proportionately.
Why is the rubbish collection fee on Mallorca rising right now?
Ley 7/2022 obliges municipalities to introduce a specific, non-deficit rubbish fee that reflects the real disposal costs. The implementation deadline expired on 10 April 2025, so the obligation now applies. How your municipality has implemented it is set out in its Ordenanza fiscal.