The Cadastral Reference Value, in effect since January 1, 2022, has transformed the way property taxes are calculated and real estate transactions are carried out. This article provides an overview of the system, its implications for various parties, and practical guidance for property owners and buyers.
Understanding the Cadastral Reference Value
The Cadastral Reference Value is determined by the Directorate-General for the Cadastre. It reflects the market price based on the analysis of all notarized property transactions each year. Unlike the previous system, which often led to disputes due to its ambiguous nature, this value aims to bring more objectivity and fairness to property tax assessments, although in many cases the final result may not align with the actual real estate market.
How is the Cadastral Reference Value calculated?
The calculation of the Cadastral Reference Value involves several steps:
- Data collection: The Directorate gathers data from all notarized property transactions during the two years prior to the relevant year.
- Analysis: This data is analyzed to determine the average prices of different types of properties.
- Adjustment factors: Factors such as location, property type, and condition are considered to adjust the values.
- Publication: The new values are published annually and are accessible to anyone.
Impact on property taxes
The introduction of the Cadastral Reference Value primarily affects the following taxes:
- Property Transfer Tax (ITP) and Stamp Duty (AJD): The taxable base for ITP and AJD is now the Cadastral Reference Value.
- Inheritance and Donations Tax (ISD): The ISD will also use this value as the taxable base.
Impact on real estate transactions
Buyers, in particular, need to be aware of how the Cadastral Reference Value can influence property prices and tax obligations. For example, if the Cadastral Reference Value is higher than the declared sale price, the buyer may face additional tax liabilities. It is crucial for the parties involved in real estate transactions to understand this data to avoid unexpected costs.
Implications for property owners and prospective buyers
Property owners and prospective buyers should:
- Review the Cadastral Reference Value of their property: Ensure that it is accurate and reflects the property's market value.
- Understand the tax implications: Know how the Cadastral Reference Value impacts annual property taxes and potential sale scenarios.
- Prepare for appeals: If the Cadastral Reference Value seems inflated, be ready to challenge it. At Catastraly, we offer specialized services in this area.
How to find your Cadastral Reference Value
You can find the Cadastral Reference Value of your property through the “Electronic Headquarters of the Cadastre” website:
- In the section labeled “Cadastral Reference Value.“
- Select the current year, “Consult Cadastral Reference Value.“
- Log in and provide the cadastral reference of the property.
Modify the Cadastral Reference Value
If you believe the Cadastral Reference Value of your property is incorrect, you can request a modification from the Directorate-General for the Cadastre. You can consider the following points to see if there are obvious options for modifying it:
- The market value of similar properties does not match the assigned Cadastral Reference Value.
- The sale price of your property is much lower than its Cadastral Reference Value.
At Catastraly, we specialize in effectively modifying the Cadastral Reference Value. We offer a free study to assess whether it is possible to modify the Cadastral Reference Value of your property. If the analysis is favorable, we provide a full service to help you save significantly on taxes.
We have extensive experience in modifying the Cadastral Reference Value in various provinces of Spain, achieving numerous successful results for our clients.
Frequently Asked Questions (FAQs)
What is the Cadastral Reference Value?
The Cadastral Reference Value is an estimate of a property’s market value used for tax assessments, based on recent property transactions.
How is the Cadastral Reference Value determined?
It is determined through the analysis of data from all notarized property transactions annually, adjusted by factors such as location and property type.
Can the Cadastral Reference Value be higher than the market value?
No, it should not exceed the market value, although we often encounter this due to incorrect valuation. If it is higher, it is possible to modify the Cadastral Reference Value.
How can I find the Cadastral Reference Value of my property?
You can find it through the “Electronic Headquarters of the Cadastre” website, in the section labeled “Cadastral Reference Value.“
What taxes are affected by the Cadastral Reference Value?
It affects the Property Transfer Tax (ITP), the Stamp Duty (AJD), and the Inheritance and Donations Tax (ISD).
Can I modify the Cadastral Reference Value of my property?
Yes, you can. It is not a fixed value and can often be corrected.
The Cadastral Reference Value represents a significant change in property tax assessments and real estate transactions. By understanding its implications and using the available resources, property owners and buyers can optimize the referenced valuation to achieve considerable tax savings.
References and further reading
For more detailed information, visit the official Cadastre website.
