Municipal licences and local taxes for home-based freelancers

Terms used

• IAE — The IAE is the local business tax; individual freelancers are exempt from paying it.
• IBI — The IBI is the yearly local property tax paid by the owner of a property.
• Declaración responsable — A declaración responsable is a sworn statement to the town hall that you meet the rules for your activity.
• Comunicación previa — A comunicación previa is a notice you give the town hall that you are starting an activity.
• ICIO — The ICIO is a local tax on construction, installations and works.
• Vado — A vado is a permit for vehicle access across the pavement to a driveway or garage.
• BOP — The BOP is the provincial official gazette, where approved local ordinances are published.

Key rules

• IAE: As an individual freelancer you are exempt from the local business tax (IAE), but you still declare your activity in the tax census.
• Licence: A quiet desk job at home often needs no licence, but visitors, staff, machinery, storage or noise usually do.
• Town hall: Each town hall sets its own rules and rates, so ask before you start.
• Community and landlord: Community statutes or your lease can ban business use even when the town hall allows it.

The short answer

As an individual freelancer you do not pay the local business tax (IAE), but you still declare your activity in the tax census. Everything else depends on your town hall, and sometimes your region. Check before you start, not after.

The local business tax and the census

You declare the start of your activity with the Agencia Tributaria before you begin. You use form 036, or the simpler form 037 if you qualify. The form shows your activity code and your exemption. Nothing is paid for IAE.

Companies are treated differently. They are exempt only below a turnover threshold, so do not assume a company is exempt too.

Do you need a licence to work from home?

A quiet, desk-based activity such as consulting, design or programming usually needs no municipal licence. That means no customers visiting, no staff, and no noise or nuisance. Many town halls ask for nothing. Others ask for a declaración responsable or a comunicación previa.

You will usually need a licence or a declaración responsable if you have any of these:

• customers visiting
• staff
• machinery
• storage
• noise or other nuisance

In that case the home must also be suitable for the use. Rules differ by town and sometimes by region, so ask the town hall. The checklist below shows where to ask.

Other local charges

• IBI: You pay it on the home as usual. Working from home does not normally change it.
• Works and opening licences: The tax on works (ICIO) and the licence fee apply only if you need works or an opening licence.
• Rubbish charge: Business rates usually apply to business premises. A home used as an office normally stays on the household rate. Confirm this with the tax department.
• Vado: This driveway access fee applies only if you have a vehicle access with a permit.

Rules that can stop you working from home

Zoning in the local urban plan sets which uses are allowed. Residential zones often allow a small office use. Limits can include a maximum share of the floor area, no staff and no public visits.

If you own your home, your community's statutes may ban business use. If you rent, check that your lease allows more than housing use, and ask your landlord for consent. The warning below covers these points.

Finding your town's rules

Look on the town hall's website, usually in the online office or transparency section, under "Ordenanzas fiscales" for taxes and "Ordenanzas y reglamentos" for the rest. Approved ordinances are also published in the provincial official gazette (BOP), which is the authoritative version. In some regions the regional gazette is used instead. If you find nothing online, ask the town hall's secretary's office or registry for a copy.

What to check with your town hall and region before starting

What to check with your town hall and region

• Find the right town hall department on its website under Empresa, Emprendedores, Licencias or Sede electrónica, or call 010 or ask at the OAC (citizen service office).

• Ask the licences department (urbanismo or licencias) whether your home activity needs a licence, a declaración responsable (a sworn declaration that you comply) or a comunicación previa (a notice that you are starting).

• Tell them if you will have visiting customers, staff, machinery, storage or noise, because these usually mean a licence or declaración responsable and suitable premises.

• Ask the tax department (gestión tributaria, hacienda or rentas) whether rubbish charges, a vado (driveway access permit) fee or other local fees apply to you.

• Confirm that your IBI (the yearly property tax) stays as usual, and that works or an opening licence are the only things that trigger the ICIO (tax on works) and licence fees.

• Visit the local employment and business agency (ADL, Agencia de Desarrollo Local) or the ventanilla única empresarial for free guidance and for local or regional schemes.

• Look up any grant call in the regional gazette and in the national subsidies database (BDNS) to see its opening and closing dates, budget and rules.

• Check that the application window is still open, the call is for the current year, the rules have not been amended and the budget is not used up.

• Open the call's page on the granting body's online office (sede electrónica) to apply, and contact that body directly if you still have doubts.

What to watch out for

• Community statutes may ban business use: If the statutes of your building are registered and forbid professional or business use of homes, the community can warn you and then go to court to make the activity stop. Activities that are harmful, noxious, dangerous or illegal are also not allowed. Read the statutes before you start, and ask the community administrator if anything is unclear.

• Zoning limits on home offices: Residential zoning often allows office use at home only within limits, such as a maximum share of the floor area, no nuisance, no staff and no public visits. Going beyond them can mean you need a licence for the premises. Ask your town hall's licences department whether your set-up fits the local plan.

• Rented homes need the landlord's consent: If your lease is for housing use only, working from the home as a business may breach it. Ask your landlord for written consent before you register the activity at that address.

Frequently asked questions

Where can I find my town's ordinances on taxes and licences?

Your town hall's website is the first place to look, usually under "Ordenanzas fiscales" or "Ordenanzas y reglamentos" in its online office or transparency section. The official gazette of your province (the BOP) publishes approved ordinances and amendments, and you can search it by town and date.

Does working from home change my property tax or rubbish charge?

In most cases, no: you pay the IBI (the yearly property tax) on your home as usual, and office use at home does not normally change the rate. Commercial rubbish charges usually apply to business premises, not to a home used as an office, so the household rate stays. A driveway permit (vado) fee only applies if you have one.

Does my community of owners need to approve me working from home?

Usually not for quiet office work, unless the community statutes (estatutos) ban professional or business use of homes. If you rent, the landlord's consent is needed when the lease is for housing use only. Read the statutes and your lease before you start.

What if my town hall asks for a declaración responsable?

Some town halls ask for a declaración responsable, a sworn statement that your activity meets the rules, or a simple notice that you are starting. Ask the licences department which one applies. It is more likely if you receive visitors, have machinery or storage, or cause noise.