For members


What to do with a damaged bank note in Spain?

Bank notes are fairly durable, but they can get wet or torn and become too damaged for others to accept them, so what can you do about it?

What to do with a damaged bank note in Spain?
What to do with a damaged bank note in Spain? Photo: Bruno /Germany / Pixabay

Bank notes are difficult to tear unless you deliberately do so, but sometimes they can get wet and rip or so damaged that you can no longer see all the images. In this case, you’ll find that some shops may not accept them in that condition.

Euro notes have special characteristics so that they resist the passage of time. They are made with 100 percent cotton fibres and small bills, which are the most common, are coated with a special varnish, which also protects them from dirt or deterioration.

Even though paying with card has become a lot more popular in recent years, particularly during the pandemic, according to the Bank of Spain, cash is still the most widely used payment method, especially for small purchases. 

The report ‘Studies on habits with cash 2022′, published in October of 2022, and carried out by market research company Ipsos, confirms that cash is still the means of payment that is used most frequently.  

This is followed by cards, then mobile devices or apps. The report explains that cash is a universal means of payment and is used by almost the entire Spanish population since three out of five people use it on a daily basis.

READ ALSO: Is Spain going cashless?

With cash still so popular, it’s inevitable that at some point one of your notes will get damaged, so it’s important to know what to do when that happens.

So what can you do about it? Are you just down €20 or is there some way you can exchange it?

The Bank of Spain has advised on the steps you need to take if your banknote is damaged.

Firstly, you can present your damaged banknote at any branch of the Bank of Spain or any national central bank in the Eurozone and they should exchange it for you.

Banks should accept the damaged note whether more than half of the note has been destroyed or less than half.

READ ALSO – EXPLAINED: What are Spain’s rules and limits on cash payments?

What if my banknote has anti-theft marks on it?

Anti-theft marks are usually ink stains that have been left on a note because they were stolen from an ATM machine.

The Bank of Spain warns that if you suspect a note has been marked in this way and was stolen, then you should not accept it if someone is trying to pay you with it or give you it as change. You can simply ask for it to be exchanged for another.

When will banks not accept my damaged note?

If your note does have the ink-stained anti-theft mark on it, then Spain’s Banknote Analysis Unit warns that the Bank of Spain will not exchange it. Therefore, it’s very important that you don’t accept these in the first place.

The Bank of Spain will also not exchange any notes that have been intentionally damaged or defaced, so you can’t deliberately go around drawing on your bank notes or ripping them and then expect them to be changed.

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For members


Where your taxes go: how local government spends your money in Spain

Have you wondered how your local town hall raises funds and what your money is being spent on or how it's divided? Here's what you need to know.

Where your taxes go: how local government spends your money in Spain

Politics in Spain is incredibly regional and localised, with governments at the regional (known as autonomous community) and local level (municipality) wielding significant amounts of power over how things are done.

Local governments also have a significant amount of power over how and where your money is spent and on what. If you’ve ever wondered where it all goes to, then read on. 

Where the money comes from?

Municipalities in Spain generally receive money in three ways: from the government, from the regional government, and, of course, from its residents: that is, the local taxes they levy and the fees they charge for providing public services such as rubbish collection.

According to RTVE, money from the national and regional governments combined makes up around a third of municipal income (35 percent) on average across the country. But it’s municipal taxes that generate the most money for town halls, often 50 or 60 percent of the total income they receive.

Municipalities charge their citizens three taxes: a property tax, known as IBI; a road tax, known as VTM; and the Economic Activities Tax, called the IAE.

There are also two optional taxes that can be levied at a local level: the IIVTNU, which taxes the surplus value of a property when it is sold, and a tax on construction and buildings works that effectively functions as a licence to be able to build in the municipality.

READ ALSO: Ten acronyms you need to know to buy a property in Spain

Generally speaking, the tax that costs inhabitants the most (and brings in the most for town halls) is the Impuesto sobre bienes inmuebles or IBI, wich is the property tax. According to statistics from the Spanish treasury, on average it contributes over a quarter (27.5 percent) of the non-financial income to municipal governments and councils.

READ ALSO: What is Spain’s IBI tax and how do I pay it?

In fact, in Spain, there are fifty municipalities that collect more than €2,000 per inhabitant solely on IBI alone.

But that’s not the norm. The average collection in Spain is €365 per inhabitant, though more than 4,000 municipalities collect less than €300 per inhabitant.

Among the most popular places for foreigners to live in Spain, the average IBI revenues per inhabitant (per year) between 2019 and 2021 were:

  • Alicante – €275.54
  • Málaga – €241.76
  • Madrid – €459.38
  • Palma de Mallorca – €275.71
  • Valencia – €299.99
  • Barcelona – €421.83

How do they spend the money?

So, what do the local governments and town halls do with all the tax money they’ve gathered from various places and how do they spend it?

Municipalities spend their tax revenue on providing public services, which can be maintaining public parks, sweeping the streets, repairing lampposts and removing graffiti.

These basic services take around up an average of 40 percent of a town hall’s total expenses, double the 20 percent they allocate to general expenses such as running and paying the staff on the city council itself.

Another 15 percent is spent on public services such as schools, libraries and sports facilities, and 12 percent goes to social services such as care and employment services. Another seven percent goes on local infrastructure such as local transport networks.

READ ALSO – EXPLAINED: How to pay less Spanish IBI property tax

The amount local governments spend, however, can vary wildly, and depend on the size, location and needs of each municipality.

Towns with less than 5,000 inhabitants allocate twice as much per inhabitant to general expenses, while bigger cities spend more on basic services, as they need to devote more resources to a much larger number of people. Often, this is reflected in the tax burden.

From 2019 to 2021, the average expenditure of the 7,751 municipalities across the country was €1,557 per inhabitant per year. Most municipalities spent between €1,000 and €2,000 per person in that time, although there were 2,200 localities below that threshold.

In municipalities of interest to foreigners, the average spend per inhabitant between 2019-2021 was:

  • Alicante – €728.86
  • Málaga – €1041.93
  • Valencia – €1069.65
  • Barcelona – €1680.50
  • Palma – €959.78
  • Madrid – €1419.59