I am writing about this issue because I had a recent case in one of my latest closings that I thought it was worth to comment.

The first question would be: who is liable for that IBI debt?

The owner at the time when the receipts were due is the liable subject. However, the actual owner has subsidiary liability on that debt. That means that if the Administration (in the case of the IBI and the province of Málaga is the Patronato de Recaudacion Provincial) is unable to recover that debt after using all legal means to achieve it, the actual owner will be-come liable. The Administration will have to declare its impossibility to recover that debt (declaración de fallido) and then initiate a new proceeding against the actual owner.

If the actual owner has not been notified of that debt until the declaration of impossibility by the Administration, can the debt be considered prescribed?

The prescription period for that IBI debt is four years counted from the last notification by the Administration or the issu-ing of the original IBI receipt. However, if the Administration has been notifying the original debtor, not the actual owner, on timely manner that prescription is not applicable. Therefore, the answer is NO, if the Administration has been notifying the original debtor in a timely manner, the debt is not prescribed even for the actual owner.

Does the new owner have to pay the penalties and/or default interest that were being applicable to the IBI receipt payable by the original debtor?

The answer is NO. When the Administration declares the impossibility to recover the debt from the original debtor and starts a new proceeding against the actual owner of the property, it has to write off the penalties and default interest ap-plied to the original debt.

Since each particular case is different, it is fully recommended that you check your own details with your lawyer or tax advisor.