Key Tax Valuation Concepts in Spain: The “Valor Catastral” and the “Valor de Referencia”

In Spain, two central valuation figures play a crucial role in determining the tax burden for property owners: the “Valor Catastral” and the newly introduced “Valor de Referencia”. These values are of great importance to every property owner as they directly influence the taxes to be paid.

The “Valor Catastral”

The “Valor Catastral” is a tax value set by the Spanish cadastral offices for each property. It serves as the basis for calculating several taxes, including property tax (Impuesto sobre Bienes Inmuebles, IBI), capital gains tax (Impuesto sobre el Incremento de Valor de los Terrenos de Naturaleza Urbana or Plusvalía Municipal / IIVTNU), and income tax (Impuesto sobre la Renta de las Personas Físicas and Impuesto sobre la Renta de no Residentes / IRPF and IRNR). This value reflects the property value considering factors such as location, size, type of use, and year of construction. However, the “Valor Catastral” is generally set significantly below market value. The setting of the “Valor Catastral” is done through collective assessment procedures that are carried out only at large intervals because they are complex and require a reassessment of all properties of a certain category within a municipality. Until the introduction of the “Valor de Referencia,” the “Valor Catastral” also served as the minimum assessment basis for calculating certain taxes.

The “Valor de Referencia”

In January 2022, the “Valor de Referencia” was introduced, a new valuation standard that is closer to the actual market value of properties. This value is also determined by the Spanish cadastral office and is particularly relevant for calculating the tax on property transfers and documented legal acts (Impuestos sobre Transmisiones Patrimoniales y Actos Jurídicos Documentados / ITP or AJD), as well as inheritance and gift tax (Impuestos sobre Sucesiones y Donaciones / IS or ID). The “Valor de Referencia” is updated annually and is based on the purchase prices of notarially certified property sales contracts. By analyzing this data, the cadastral office divides the national territory into smaller regions within which properties have comparable characteristics and values. An average price per square meter is determined for each region, which is then adjusted by various correction factors (e.g., category, age, condition of the property). A final reduction factor ensures that the “Valor de Referencia” does not exceed the market value. Unlike the “Valor Catastral,” the “Valor de Referencia” is publicly accessible and can be viewed on the cadastral office’s website.

For property owners and potential buyers in Spain, understanding and knowing these values are of great importance. They directly influence the tax burden associated with owning and transferring properties. With the regular update of the “Valor de Referencia,” property owners can better estimate the tax obligations they can expect, especially in terms of transactions and inheritances.

For more information on cadastral values and their impact on your property in Spain, please do not hesitate to contact us. Visit our website or contact us directly to address your individual questions.

WOULD YOU LIKE TO
HEAR FROM US?

Scroll to Top