The New cadastral reference value is a new indicator that came into force in 2022 to determine the taxes that must be paid in the acquisition of assets and real estate and homes.

What is the New cadastral reference value?

In 2021, specifically, in July the Government approved a Law on Measures to Prevent and Fight Fraud that includes a new reference value that came into force on January 1, 2022.

The objective of the approval of this indicator by the Ministry of Finance and Public Function is to transfer the burden to buyers and avoid fraud when paying taxes.

This cadastral reference value will be imposed next year and has no retroactive effect. That is, it will only affect properties purchased from 2022.

This new value will affect when paying the tax base of two taxes, the ITP (Patrimonial Transfers) and Documented Legal Acts or AJD and the ISD or (Inheritance and Donations Tax).

Note: from now on they will be ITP, ISD and AJD

The calculation of these taxes will not affect homes purchased before 2022, but it will affect those purchased after that year.

As indicated by the website of the General Directorate of Cadastre, this indicator is defined as follows:

It is the one determined by the Cadastre as a result of the analysis of the prices of all the purchases and sales of real estate that are carried out before a notary public, based on the data of each property, registered in the Real Estate Cadastre.

The reference value of a property is one of the economic characteristics of its cadastral description.

How does the new cadastral reference value work?

The calculation of this reference value will be made each year simultaneously in all the municipalities and will be permanently available at the Electronic Office of the Cadastre.

This indicator will not be protected and will serve as the tax base for the aforementioned taxes, which are ITP, ISD and AJD.

That is, on Documented Legal Acts, Patrimonial Transfers and Inheritances and Donations

The determination of the reference values of the properties intends that the taxable base of the ISD and ITP taxes change to the real value as a base in these taxes.

This new indicator can never exceed the housing market value price. To do this, this indicator will be calculated using an average of the price of flats located in certain areas of the same municipality.

These areas do not have to coincide with a neighborhood or district and the information for their calculation will be taken from the data of all purchases and sales made before a notary or registered in the Property Registry.

On the other hand, the General Directorate of Cadastre will be in charge of determining this indicator, which, be careful, is different from the cadastral value.

It must be taken into account that the cadastral value does affect when paying taxes such as IBI or personal income tax on the income statement.

What does this value mean for consumers and buyers?

Once we have explained the theory and operation of this indicator, it is time to understand it and explain how it can affect the buyers of a property.

The important change from next year is to understand that this indicator intends to change the tax base of the ISD, AJD and ITP taxes for this indicator.

That is to say, formerly the taxpayer was in charge of declaring the asset of the value through a series of rules established to determine the calculation of the market value of a property.

For example, before it was paid for the purchase value of buying a propertyFrom now on it will no longer be like that.

One of the reasons is that in the past a part of the price was recorded and another was paid in black money.

To avoid this problem of real calculation of the Treasury, a theoretical value is established.

It must be taken into account that this new indicator can be inconvenient for those cases in which said reference is higher than the real market value of a property.

However, the Cadastre on its website states the following:

“The reference value will not exceed the market value. For this, a reduction factor will be applied in its determination.

In other words, its use as a tax base does not imply an increase in taxation.

This does not mean that if the declared value, the price or the consideration paid are higher than the reference value of the property, the highest of these magnitudes will be taken as the tax base.

Thus, the reference value of the property will be the minimum tax base for these taxes.

How can these values be consulted?

They will be available at the Electronic Office of the Cadastre from January 1 of the following year. They can be consulted through the procedure for their determination at Headquarters.

In said Headquarters, the cadastral holders will also be able to know the elements that have been applied in the individualized determination of the reference value of their properties.

In addition, the reference values will be provided through the Cadastre Hotline (91 387 45 50 and 902 37 36 35) where you can call to make an appointment and consult about said values.

What to do if you disagree with the value of your property?

It can be challenged before the corresponding tax administration by the taxpayer, that is, the one who acquires the home only when it has a tax effect and this value acts on the tax base of the ITP, AJD and ISP.

If this happens, the cadastral owner may file an appeal on the occasion of the rectifications of their self-assessments or the presentation of appeals against the assessments that are carried out in their case.

That is, you can appeal whenever the Treasury uses said value and the previously mentioned conditions are met.

We hope we have clarified what the New cadastral reference value consists of and, above all, that you have understood it, since it can be a bit difficult to understand.