In short. The ICIO is the tax your ayuntamiento (town hall) charges you for building, and it runs from 3 % to 4 % of the material execution budget. It is a municipal tax, not a national one: the State only sets the ceiling, and each of the municipalities of the Comunidad de Madrid decides its own rate below it. And it does not come alone: on top of it you pay a building permit fee, a separate charge with its own by-law, which in some municipalities weighs almost as much as the tax.
On a house of 300 m² with a material execution budget of 300,000 €, the gap between the cheapest and the most expensive municipality in this table is 9,750 €. For the same house. By moving across a municipal boundary.
What the ICIO is and how it differs from the fee
They are two separate payments and you have to make both. It is the most expensive confusion on a self-build, because anyone who budgets only for the tax leaves out between 0.5 % and 3 % of the building budget.
ICIO
It is charged on the value of what you build. It is governed by article 102 of the consolidated Local Finances Act (texto refundido de la Ley Reguladora de las Haciendas Locales), which sets a ceiling of 4 %; each town hall decides whether to go up to that maximum or stay below it.
It is worked out on the material execution budget (presupuesto de ejecución material, PEM, the cost of the building work itself): no general overheads, no contractor’s profit and no VAT.
Planning permit
It pays for the work of processing your file: reviewing the design, reporting on it and deciding. It has no percentage ceiling in law, because its limit is the cost of the service.
Some councils charge it as a percentage of the budget and others as a flat fee by band. Madrid, Getafe, Alcalá, Alcobendas and Sevilla la Nueva use a flat fee.
What you pay in each municipality
Thirty municipalities of the Comunidad de Madrid, checked one by one against the fiscal by-law (ordenanza fiscal, the tax rules each council approves for itself) published by the council or against its notice in the BOCM, the region’s official gazette. The last column is tax plus fee on one specific case: a detached house of 300 m² with a material execution budget of 300,000 €. We use a case rather than a percentage because otherwise flat fees cannot be compared with percentage ones.
It does not include the first occupancy licence, which is a third charge and goes separately. In Torrelodones that is another 1.65 % of the final budget; in Las Rozas, 0.53 %; in Boadilla, 0.5 %; in Pozuelo, 32 € and that is that. There is a guide on it: the first occupancy licence.
| Municipality | ICIO | Building permit fee | ICIO + fee on 300,000 € |
|---|---|---|---|
| Alcalá de Henares Minimum base taken from the region’s unit cost values. | 4 % | Flat fee by band: 3,600 € | 15,600 € |
| Alcobendas ⚠ The bands jump sharply: at 350,000 € of PEM the fee rises to 8,054.80 €. | 4 % | Flat fee by band: 4,698.55 € | 16,698 € |
| Alcorcón A high percentage fee, though not the highest: Móstoles charges 2.68 % and Majadahonda 3.00 %. | 4 % | 2.50 % | 19,500 € |
| Boadilla del Monte First occupancy adds another 0.5 % of the PEM. | 4 % | 1.50 % | 16,500 € |
| Brunete | 4 % | 2.00 % (minimum 150 €) | 18,000 € |
| Collado Villalba From 120,200 € of PEM upwards the 1.20 % applies. | 4 % | 1.00 % / 1.10 % / 1.20 % by band | 15,600 € |
| Colmenar Viejo Minimum unit value of 602.60 €/m² for a detached house. | 3.5 % | 0.47 % | 11,910 € |
| Galapagar | 3.5 % | 1.80 % (minimum 150 €) | 15,900 € |
| Getafe The cheapest fee in the set on a single house. | 4 % | Flat fee: 411 € for up to 2 dwellings | 12,411 € |
| Guadarrama One of the lowest rates in the table, behind Valdemorillo. Note: minor works pay a 3.4 % fee. | 3.4 % | 0.71 % | 12,330 € |
| Las Rozas de Madrid The 0.84 % only applies above 240,000 € of PEM. | 4 % | Sliding scale 1.05 % → 0.84 % by budget | 14,520 € |
| Leganés | 4 % | 1.00 % | 15,000 € |
| Madrid capital The lowest rate in the metropolitan area. Cut from 4 % in 2024. | 3.75 % | Flat fee: 1,011.70 € up to 500 m² | 12,261 € |
| Majadahonda ⚠ The heaviest municipal charge in the region: 7 % of the PEM. | 4 % | 3.00 % | 21,000 € |
| Móstoles | 3.7 % | 2.68 % (minimum 51.04 €) | 19,140 € |
| Navalcarnero Minimum unit value of 677.31 €/m² for a detached house. | 4 % | 1.70 % (minimum 29.77 €) | 17,100 € |
| Pozuelo de Alarcón First occupancy is only 32 € per dwelling. | 4 % | 2.00 % | 18,000 € |
| Rivas-Vaciamadrid Regional unit values weighted by 1.15. | 4 % | 1.40 % (minimum 30 €) | 16,200 € |
| San Lorenzo de El Escorial | 4 % | 60.49 € + 2 % on the excess | 18,048 € |
| San Sebastián de los Reyes The fee changed in 2026: it used to be a flat fee by band. | 4 % | 1.85 % (minimum 250 €) | 17,550 € |
| Sevilla la Nueva The bands in the text overlap; worth confirming. | 4 % | Flat fee by band: 1,593.88 € | 13,593 € |
| Torrelodones ⚠ Unit value of 1,100 €/m². At 300 m² the ICIO is assessed on 330,000 €. | 4 % | 1.90 % (minimum 300 €) | 18,900 € |
| Tres Cantos | 4 % | 0.60 % | 13,800 € |
| Valdemorillo ⚠ The PDF still posted on their website says 4 % and 1 %: it has been repealed since 2020. | 3 % | 0.75 % | 11,250 € |
| Villanueva de la Cañada | 4 % | 0.60 % | 13,800 € |
| Villanueva del Pardillo First occupancy charged separately, at 0.75 %. | 4 % | 1.50 % (minimum 60 €) | 16,500 € |
| Villaviciosa de Odón The fee is worked out on unit values, not on the PEM in the project. | 4 % | 1.75 % | 17,250 € |
The cheapest is Valdemorillo at 11,250 € and the dearest Majadahonda at 21,000 €. That is 9,750 € of difference on the same works, and it is money that appears in no builder’s quotation, because it is not the builder who charges it.
Three municipalities we have not been able to confirm
We would rather have a blank cell we declare than a number we cannot stand behind. In these three the figure exists in a by-law of the council itself, but we have not been able to check that it is still in force in 2026, almost always because the council’s electronic office does not respond. Before budgeting in any of them, ring the town hall.
| Municipality | ICIO | Permit fee | Why we do not treat it as sound |
|---|---|---|---|
| Arganda del Rey | 4.00 % | 1.337 % | The figures are in by-laws of the council itself (ICIO from 2017, fee from 2009) and its open data register still lists them as in force, but its electronic office refused every connection and a later amendment could not be ruled out. |
| Hoyo de Manzanares | 4.00 % | 1.30 % (+0.50 % if a proyecto básico, the outline design filed with the permit application, is submitted) | Texts from 2001-2008 hosted on the municipal server. Its electronic office declares 40 fiscal by-laws but the list never loaded. |
| Moralzarzal | not verified | 1.50 % (last published wording, from 2012) | Its transparency portal has the fiscal by-laws section empty and the electronic office returns a server error. The sheet for the procedure in force still points to the same article, but that does not evidence the amount. |
What is NOT in the taxable base: the list that saves money
Article 102.1 says the base is the «real and actual cost» of the works and that it does not include VAT, fees and charges, professional fees, the contractor’s business profit «or any other item which does not strictly form part of the cost of the material execution».
Translated into the items of the quotation your builder is going to hand you, with the case law that backs it:
| Item | In the base? | Authority |
|---|---|---|
| General overheads | No | Supreme Court judgment of 5 March 2004, appeal 9549/1998 |
| Contractor’s industrial profit | No | The same one, and the Supreme Court’s of 1 December 2011, appeal 95/2010 |
| Fees of the architect and of the arquitecto técnico | No | Article 102.1 and the judgment of 5 March 2004 |
| Health and safety study | No | Supreme Court judgments of 5 March 2004 and of 17 November 2005, appeal 685/1999 |
| Quality control and testing | No | Settled position of the Tribunal Superior de Justicia of Madrid, the region’s highest court, judgment 198/2006 and later ones. There is no Supreme Court judgment on this |
| VAT | No | Article 102.1, express wording |
| Machinery and equipment manufactured off site | No, but yes to its installation | Supreme Court judgment of 2 June 2001, appeal 1778/1996 |
| Waste management | Yes, in Madrid | See the warning below: here the position runs the opposite way to what is usually said |
| Lifts and lifting equipment | Yes | Supreme Court judgment of 5 October 2004, appeal 6112/1999 |
| Built-in electrics, plumbing and heating | Yes | Supreme Court judgment of 16 December 2003, appeal 4558/1998 |
Careful with waste management, which almost everybody gets the wrong way round. The story going about is that it is excluded. In the Comunidad de Madrid it is not: the Tribunal Superior de Justicia of Madrid has included it three times — judgments 95/2019, 600/2020 and 603/2022, all from the same chamber — on account of the «inseparable and necessary nature, in any building process, of the activity aimed at removing and properly disposing of the waste it produces».
The distinction that does work: they separate the waste management study, which is a technical document and therefore professional fees, from the management itself — haulage, removal and landfill levy — which is material execution. If you want to deduct the study, it has to be itemised and priced separately in the certification: judgment 600/2020 refused the exclusion precisely because the amount was not separated out.
And this is what decides an appeal: the final certification of the works with the visado — the stamp the professional architects’ body puts on a set of documents, certifying that whoever signed them is registered, insured and entitled to sign — broken down chapter by chapter. It is not a formality. Without the breakdown you cannot evidence which part should be deducted, and the council assesses on the whole. On a Spanish site there are always two technicians signing it, an arquitecto for the design and an arquitecto técnico, or aparejador, for the execution: articles 12 and 13 of Law 38/1999 on Building Regulation require both. Fran Cortés holds the two qualifications.
Provisional and final: what hardly anyone knows
When you apply for the permit, the council issues a provisional assessment. It may calculate it from your stamped budget or from its own unit cost values, and the Supreme Court confirmed in its judgment 261/2021 that there is no order of preference: it may use the unit value even though you have filed a budget.
When the works finish the final assessment arrives, and there everything changes. Supreme Court judgment 273/2021, of 25 February, puts it plainly: the base is «the real and actual cost, not the budgeted cost nor the estimated cost». Making a final assessment on a unit value higher than the real cost would be «taxing an economic capacity other than the one provided for by law».
- The unit value is a payment on account, not the base. On the final assessment it has to give way to the cost evidenced.
- If the works cost less than budgeted, you get money back. And the discount on the award is deducted: Supreme Court judgment 736/2020.
- The council cannot use the final assessment to bring in new items that it did not value in the provisional one.
- The final assessment requires a procedure with a hearing. Supreme Court judgment 168/2021: an adjustment made without giving you one can be set aside on that ground alone.
The trap of the minimum unit values
This is the part almost nobody explains and the one that causes the most upset. Many councils do not assess on the budget in your design: they assess on the higher of two figures, your stamped budget or a minimum base worked out from unit cost values per square metre.
Which means: trimming the budget does not push the tax below that floor.
- Torrelodones — 1,100 €/m² built above ground level on a single house. On a house of 300 m² the base is 330,000 € even if your design says 300,000: the ICIO goes from 12,000 to 13,200 €. The fee, on the other hand, does use the budget in the design.
- Colmenar Viejo — 602.60 €/m² on a detached house and 569.25 € on a terraced or semi-detached one.
- Navalcarnero — 677.31 €/m² detached, 625.02 € semi-detached.
- Rivas-Vaciamadrid — the region’s unit values weighted by a coefficient of 1.15.
- Villaviciosa de Odón, Villanueva de la Cañada, Alcalá de Henares and Valdemorillo — they use the Comunidad de Madrid reference costs as the minimum base.
The reliefs hardly anyone claims
The ICIO allows discretionary reliefs and most self-builders do not apply for them, simply because they do not know they exist.
They are granted only on application, and there is a deadline. You have to ask for them expressly, and in several municipalities they are lost if you ask after the permit has been granted. That is money that falls away because a piece of paper was not signed in time.
They are also almost never cumulative: the most favourable one applies and the rest fall away. And watch the solar one: in Guadarrama and in several other municipalities the part the Spanish Building Code already obliges you to install is not relieved, only whatever you put in above that minimum.
An example with numbers
A detached house of 300 m² of built floor area, material execution budget of 300,000 €. Same design, same builder, two municipalities twenty minutes apart by car:
| Item | Valdemorillo | Majadahonda |
|---|---|---|
| ICIO | 3 % → 9,000 € | 4 % → 12,000 € |
| Building permit fee | 0.75 % → 2,250 € | 3 % → 9,000 € |
| Total to the town hall | 11,250 € | 21,000 € |
| As a share of the building budget | 3.75 % | 7.00 % |
9,750 € of difference for the same house. It is not an item you can negotiate with anybody: the full council sets it and you pay it.
How to find out your own figure without doing the sums
The construction cost calculator has these rates loaded and adds your municipality’s ICIO and fee to the rest of the items: the building work, the technical team, the site works and the contingency reserve. No sign-up.
And if what you have on your hands is a full self-build, the guides cover the rest of the paperwork: the libro del edificio or building manual, the first occupancy licence, the self-build mortgage and registration at the Land Registry, which is a different body from the Catastro, the land register kept for tax purposes.
Frequently asked questions
What exactly is the ICIO?
The tax on constructions, installations and works (Impuesto sobre Construcciones, Instalaciones y Obras). Your town hall charges it on any works that need a permit or a declaración responsable, the self-certified declaration that replaces a permit for lighter cases, and it is worked out as a percentage of the material execution budget. The legal ceiling is 4 %, under article 102 of the consolidated Local Finances Act, and each council decides whether to apply that maximum or come in below it.
Are the ICIO and the permit fee the same thing?
No, and this is the most expensive confusion of the lot. They are two separate payments, under two separate by-laws, and you pay both. The ICIO is a tax on the value of what you build; the fee pays for the work of processing your file. In Majadahonda the fee is 3 %, almost as much as the tax itself.
Which budget is it worked out on?
On the material execution budget: no contractor’s profit, no general overheads and no VAT. But be careful: many councils set a minimum from unit cost values per square metre and assess on the higher of the two. If your design comes in below the unit value, you pay on the unit value.
When is it paid?
When you apply for the permit the council issues a provisional assessment. When the works finish, it checks the real and actual cost and issues a final assessment, which may be payable or refundable. The finished house nearly always costs more than the design did, so it is worth allowing for that adjustment.
Who pays the ICIO, the owner or the builder?
The taxable person is whoever owns the construction, that is, the developer: on a self-build, you. If the builder applies for the permit, he is a substitute taxpayer and may pass it on to you. In practice you pay it either way.
Are there any reliefs?
Yes, and hardly anyone claims them. The strongest one for a new house is solar energy for self-consumption: 95 % of the ICIO in the city of Madrid, Getafe, San Sebastián de los Reyes, Sevilla la Nueva and, for residential use, Alcorcón. They are granted only on application: you have to ask for them, and in several municipalities they are lost if you ask after the permit has been granted.
Does the 4 % everyone quotes apply across the whole of Madrid?
No. It is the legal maximum, not the standard rate. Of the twenty-seven municipalities verified here, six are below it: Valdemorillo at 3 %, Guadarrama at 3.4 %, Colmenar Viejo and Galapagar at 3.5 %, Móstoles at 3.7 % and the capital itself at 3.75 %.
How often do these figures change?
Fiscal by-laws are normally approved by the full council in the last quarter of the year and take effect on 1 January. We review this table every January. Even so, before you sign anything, confirm the figure with the town hall: here we tell you which article it comes from so that you can check it.
Building, and no idea what your town hall is going to charge you?
Tell us where the plot is and what you have in mind. We will tell you the ICIO, the fee, the minimum unit values if there are any, and the reliefs you can claim, which tends to be the part that gets forgotten.