Hi Jimmy,
It took me a while to get my head round the property taxes. Some of it defies logic and the jargon doesn't help either - but this is the note I made for myself when it finally sunk in...
There are 2 property taxes in Spain
a) “Declaracion de la Renta” (Modelo (form) 210) This is the Income Tax payable in Spain and is calculated by several factors.
First off find out the “Cadastral value” of the property. This is shown on the IBI (aka Suma)(see b below) and also in the property deeds. The Cadastral value is a notional value and similar to the UK “ratable value”.
The assumed earnings element will be first decided on either 1.1% or 2% of the Cadastral value dependent on when the cadastral value was last assessed. The lower figure of 1.1% applies on properties valued since 1994.
This Agencia Tributaria set the annual percentage of this figure which is actually payable. In 2011 it was 24%. So the abbreviated calculation is RV x (either 1.1% or 2%) x 0.24
The tax is paid regardless of whether or not you have any rental income from the property. The Spanish just call it “deemed rental income” – so everyone is obliged to cough up.
b) IBI (aka Suma) which is the equivalent of our Council Tax.
I used Spanish Tax Forms (http://www.spanishtaxforms.co.uk) to calculate the amount due under a) above and provide the forms required for payment. They charge £25 to do so. To actually pay the two taxes you usually to go to 2 different locations, but suggest you start with your local Town Hall. Our local bank very helpful in setting up future direct debits to reduce the annual chore involved.
Those with more knowledge may pick holes in the above, but I believe it's basically right and I hope it helps.