Madrid’s most controversial tax in recent months now has a definitive outcome, albeit with fine print: the City Council will partially refund the waste collection fee. After weeks of pressure from residents and a legal setback from the Madrid High Court of Justice (TSJM), José Luis Martínez-Almeida has confirmed that the City Council will refund the waste collection fee, but only “in cases where the law allows it,” which, in practice, excludes most Madrid residents who paid without filing any kind of claim.
The source of the mess lies in Tax Ordinance 8/2024, the regulation that established the new waste collection fee charged in 2025 to residents of the city’s 21 districts. This tax, justified by City Hall as an obligation stemming from state regulations on waste, began to be issued in the fall and sparked immediate backlash, particularly due to the huge disparity in amounts between neighborhoods and the fact that it falls on homes that already pay property tax.
Several organizations, neighborhood associations, and political groups challenged the ordinance before the TSJM, which last March declared the fee null and void due to “substantial defects” in its processing, ruling that the City Council had omitted an essential part of the technical-economic report required to justify the amounts. Nullity as of right is the most serious form of invalidity: for legal purposes, it is equivalent to saying that the tax should never have existed.
Despite this, the ruling is not yet final. The City Council has 30 days to file an appeal with the Supreme Court, and the municipal legal services are still considering whether or not to do so, while residents wonder what will happen to the money they have already paid.
Who will get their money back (and who won’t)
This is where the “fine print” Almeida refers to comes into play. The Local Finance Law allows the City Council, in the event of a canceled tax, to refund the amount collected to all taxpayers or only to those who had filed an appeal at the time, and the TSJM has opted for the second interpretation. This means there will be no automatic, blanket refund, and that the City Council will limit itself to refunding the money to those who already had an administrative proceeding open against the tax.
According to the Spanish Association of Tax Advisors (AEDAF), only those Madrid residents who filed an appeal or claim before the ruling was issued will be entitled to a refund : those who went to the Municipal Tax Agency or the Municipal Economic-Administrative Court following campaigns launched by neighborhood associations such as the FRAVM. It is estimated that this amounts to some 130,000 people, compared to the hundreds of thousands who paid without appealing, meaning that most will be excluded from the refund unless future appeals change the criteria.
City Hall has already stated that it will “strictly” comply with the ruling and refund the money in these cases, but will not extend that decision to the rest of taxpayers on its own initiative, arguing that the law does not require it to do so and that the budgetary impact would be very high. The tax generated around 300–350 million euros annually for the municipal coffers, and the final amount to be refunded will depend on how many of those 130,000 claims are successful by the end of the process.
How refunds will be processed
For those who already filed a claim at the time, the path forward will be relatively clear. If the TSJM’s ruling becomes final—that is, if the City Council does not appeal or if the Supreme Court confirms the nullity—the City Council must recognize the right to a refund and apply the standard procedure for “refund of undue payments.”
This procedure, regulated by the Madrid Tax Agency itself, involves refunding amounts overpaid to the municipal treasury due to duplicate payments, errors, or, as in this case, the annulment of the regulation that authorized the tax. The procedure can be ex officio (initiated by the Administration itself based on existing claims) or at the request of the interested party, but in both cases it is handled through the Municipal Tax Agency.
Those who did not file an appeal before the ruling face a much tougher situation. The legal doctrine applied by the TSJM—and which the City Council has decided to follow—holds that, since the payments were not challenged within the deadline, they are not considered “undue revenue” for the purposes of a mass refund. In theory, any citizen can still file a refund request with the Tax Agency within the general four-year period from the date of payment, but tax experts warn that, without a change in judicial criteria, such requests have little chance of success.