The recycling system was broken and the European Union decided to try to fix it. It did so with a new European directive that in Spain materialized in ‘Law 7/2022 on waste and contaminated soils for a circular economy’. In April 2025, the three-year window for its entry into force will expire and we will all notice its impact.
Why a mandatory garbage tax? The European directive establishes the creation of “payment systems for waste generation”, which vary depending on the actual amount of waste generated and the “reduction of mixed waste”. That is, a tax system where whoever pollutes the most, pays the most.
In Spain, this rate was defined as follows:
“A specific, differentiated and non-deficit tax rate that allows for the implementation of payment systems per generation and that reflects the real cost, direct or indirect, of waste collection, transportation and treatment operations”
What will it be like and what will it depend on? According to the previous definition, this rate will be independent of the rest of the taxes and will be paid annually.
Its amount and payment method will depend on how it is defined in each municipality, but what we do know is that it must be proportional to the amount of waste generated. That is, the less we recycle, the more we will pay.
The rate must reflect the real cost, so the entities that are in charge of waste management, such as City Councils or metropolitan areas, will not be able to absorb its cost. What happens is that there is no established way on how citizens will be made to pay; nor to what extent it will be individualized.
In short: we will pay more for garbage. Although garbage rates already existed in some municipalities, they will now become mandatory. But what has led to criticism is that while before the town councils could collect less, now they must pass the entire cost on to the residents.
It will depend on each municipality, but the tax pressure will increase from April 2025 with the arrival of this new rate. From the National Association of Local Public Finance Inspectors (ANIHPL) they indicate that “unless there are town councils that want to compensate it through a tax credit, which some are already working on that, the tax pressure is going to increase.”
A good peak (up to €150/year, according to preliminary calculations). As described by La Sexta, currently Spanish citizens pay only 40% of the total cost of the garbage service. By paying 100%, the cost will increase significantly.
According to calculations by the Madrid Tax Agency, this new rate will generate income of about 296 million euros, which, subtracting the 40 million from the current Urban Waste Rate from Activities (TRUA), remains at about 256 million euros in 2025. Taking into account that some 1.7 million properties will have to pay it, it is estimated at an average cost of about 141 euros per home in Madrid.
In the metropolitan area of Barcelona, it is estimated that this new waste rate will be between 80 and 150 euros per year.
The million dollar question: how do we know who recycles more or less? The most complex thing about this new garbage rate is precisely what the law does not establish: how the calculation of how much pollution is carried out. What we are seeing is that each city council is proposing a specific formula.
In the case of Madrid, to calculate the basic rate the cadastral value of each home or premises has been taken into account, while for generation the amount of waste and the percentage of separation of each of the 131 has been considered. neighborhoods of the capital.
In the case of Barcelona, the city council proposes calculating the garbage rate through water consumption and the nominal flow. “Two explanatory, rational and sufficient indications of waste generation,” they explain.
Lower IBI to compensate? Over the next few months we will learn more details about how each city in Spain proposes this new mandatory garbage rate. To compensate for this greater tax pressure, some town councils have also considered reducing the IBI.
Image | Community of Madrid
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