Reference value: Key to your taxes and wealth management
The cadastral reference value is an instrument developed by the tax administration for the valuation of real estate.
As of 2022, this value has become essential for determining the tax base for various taxes.
This system is based on the analysis of sales and other relevant data of the properties.
If you are going to inherit, buy or sell a house in Spain, it is very important that you understand the reference value.
Its correct understanding is essential for proper asset management and compliance with tax obligations.
Cadastral reference value
The cadastral reference value has become an essential element in the fiscal and real estate management context.
This concept has key implications for both owners and administrations, facilitating the valuation of properties.
Definition and characteristics of the Reference value
The reference value is understood as the amount determined by the General Directorate of Cadastre, which is derived from an exhaustive analysis of the prices of real estate sales formalized before a notary.
This value is assigned to each property, taking into account specific characteristics of the property, which allows establishing an ethical basis for taxation.
Its main characteristics include:
- It reflects real data from the real estate market, since it is calculated from effective transactions.
- It cannot exceed the market value of the property, thus guaranteeing a limitation in its fiscal application.
- It is updated annually, adapting to market fluctuations and changes in the demand and supply of real estate.
The reference value is established by the Cadastre by analyzing the prices of sales made before a notary and by area.
It is determined every year simultaneously in all municipalities and can be consulted on the Cadastre website through the following link: https://www1.sedecatastro.gob.es/Accesos/SECAccvr.aspx .
By regulation, the reference value must not exceed the market value; for this purpose, reduction factors are established in its determination.
In short, it is an indicative value that will also serve:
- As a minimum tax base for the Tax on Property Transfers and Documented Legal Acts (ITPAJD) when the transfer value is lower because the parties agree so.
- Also as a minimum base for the Inheritance and Gift Tax (ISD) when the declared value of the property is lower.
- However, it does not affect in any way the cadastral value or the Real Estate Tax (IBI).
Differences with the market value of the Reference value
The cadastral reference value is distinguished from the market value for several reasons.
Firstly, the market value can vary considerably depending on external and subjective factors, such as demand, economic situation and the specific location of the property.
On the other hand, the reference value is based on statistical data and more objective assessments.
Key differences include:
- The reference value is based on cadastral data and recorded transactions, while the market value can be influenced by subjective assessments by buyers or sellers.
- The reference value sets an upper limit that cannot be exceeded, unlike the market value which can fluctuate freely.
- The reference value has direct fiscal consequences in terms of taxation, such as in the case of the Property Transfer Tax, while the market value plays a more informative role in the commercial field.
Importance in tax administration
The importance of the cadastral reference value lies in its fundamental role in tax collection.
This value has become the tax base for several taxes, making it a key tool for the tax administration in verifying the correct taxation of real estate transactions.
The main reasons why the reference value is crucial are:
- It facilitates tax equity by providing a more objective criterion in the evaluation of real estate.
- It reduces the risk of tax avoidance by standardizing property valuations.
- It helps the administration to optimize tax collection, through a solid and justified basis for the application of taxes.
Therefore, it not only represents a challenge for taxpayers, who must adapt to this new framework, but also seeks to promote greater transparency throughout the process of valuation and tax management of real estate.
Let's look at an example of a reference value
If the reference value of a sale is 150,000 euros and the agreed price is 170,000, the ITP will be calculated on 170,000 euros.
But if it were the other way around, even if the price were 150,000, if the reference value is 170,000, you will have to pay tax on this value.
Reference value in practice
It is important to keep this value in mind when transferring a property, as it can serve as a guide:
- It tells you whether you are selling or buying at a good price. For these purposes, bear in mind that this value does not take into account the work carried out on the property or its interior condition; it is based fundamentally on the location.
In general, this value is usually between 20-30% lower than the market value, this value will be updated each year according to the evolution of the real estate market.
- As has been said, it has tax implications.
Therefore, it is advisable to review it and, if a lower transfer value is agreed, bear in mind that you will have to pay tax at the reference value.
- It is possible that a property does not have a reference value.
In such a case, you will have to pay tax at the market value, although it will be subject to verification by the Administration.
Calculation of the cadastral reference value
The calculation of the cadastral reference value is a meticulous process that allows to establish a fair amount for the valuation of properties, and is determined by applying average value modules, based on data from the real estate market.
A variety of factors are considered that influence the real value of each property.
Evaluation methodology of the Reference value
The methodology used to calculate the reference value is based on an exhaustive analysis of real estate transactions.
This process is carried out by the General Directorate of Cadastre, which uses advanced statistical methods.
The information collected is analyzed by algorithms that adjust the values based on market variations and other external influences.
The data collection includes the monitoring of actual sales, as well as the evaluation of the conditions of the properties, which ensures that the resulting value is representative and applicable to each particular case.
The aim is to obtain a balance between precision and equity in the valuation to facilitate the tax function.
Data used in the calculation in the Reference value
In order to carry out the calculation of the reference value, various essential data are collected. These include:
- History of registered sales.
- Specific characteristics of each property, such as size, age and state of conservation.
- Socioeconomic factors of the area where the property is located.
- Average market price in a given period.
The combination of these data allows the reference value to be adjusted to the realities of the constantly changing market.
Periodic updating of this information is vital to maintain the relevance and effectiveness of the system.
Variables considered in the Reference value
There are several variables that are considered in the calculation of the cadastral reference value.
The most significant ones are described below.
Location of the property
The location is one of the most influential factors in the valuation.
Different geographical areas present variations in the real estate value due to aspects such as accessibility, the quality of the public services available and the demand for properties in the area.
These elements are carefully analyzed to establish a fair value.
Surface area and age
The surface area of the property, measured in square meters, has a considerable weight in the calculation. The larger the surface area, the greater the value potential.
Age also plays a crucial role, as newer buildings generally tend to have a higher value compared to older properties, unless the latter have special architectural features or are located in highly sought-after locations.
Additional features
There are specific features that can alter the value of a property. These attributes include:
- The state of repair of the property.
- The presence of additional facilities, such as gardens, swimming pools or garages.
- The quality of the materials used in construction.
- Ecological or energy-efficient aspects that can increase the attractiveness of the property.
Each of these factors is carefully evaluated to accurately reflect the real value of the property in the context of the current market.
Consideration of these variables ensures that the reference value is not just a number, but a true representation of the reality of the real estate sector.
When transferring a property, always take into account the reference value: in addition to serving as a guide, you will need to know it in order to correctly settle the taxes.
Application of the cadastral reference value in taxes
The implementation of the cadastral reference value has a significant impact on various tax areas.
Below are the main applications of this concept in the context of the Spanish tax system.
Property transfers tax and documented legal acts (ITP and AJD)
In the case of property transfers and documented legal acts, the reference value establishes the taxable base for the purposes of the Property Transfer Tax (ITP) and the Documented Legal Acts Tax (AJD).
This regulatory change has transformed the way in which taxes payable in real estate transfer operations are calculated.
When the sale of a property is formalised before a notary, the reference value becomes an essential starting point.
If the agreed price is lower than the reference value, the latter will be the one taken as the basis for the liquidation of taxes.
In this way, the aim is to ensure greater equity in taxation and avoid practices that may result in tax evasion.
Inheritance and gift tax (ISD)
The reference value also has a fundamental application in the Inheritance and Gift Tax (ISD).
In this sense, the cadastral value is used as a basis to determine the liquidation of the corresponding tax in the case of inheritances and donations of real estate.
As in property transfers, if the reference value exceeds the value declared by the taxpayer, the former will be applied as the tax base.
Thus, this mechanism not only minimises discrepancies in the valuation of real estate, but also increases transparency in the fulfilment of tax obligations linked to the inheritance and donation of property.
The correlation between the reference value and the real value of the property is essential for a fair and equitable process in taxation.
Practical examples of application
The reference value is used in various everyday situations in the real estate sector, being relevant in different transactions, both in sales and inheritances.
Below, we analyse some practical examples that illustrate its use.
Use in sales and purchase operations
In sales and purchase operations, the reference value acts as a key parameter for the settlement of the ITP.
Let us imagine a case where a property is sold for 150,000 euros, but the reference value established by the Cadastre is 180,000 euros.
Since the reference value exceeds the sale price, the tax will be calculated on the 180,000 euros, thus ensuring that the taxable base is adjusted to a more market-appropriate valuation.
This is essential, especially to prevent taxation below the real value of the properties.
Inherited property case
In the context of inherited property, let’s say a property valued at €200,000 by cadastral reference is inherited by a family member.
Although the reference value is considerable, the heir’s declaration of the value may be lower.
If the heir declares a value of €150,000, the reference value of €200,000 will be used to calculate the corresponding tax.
This demonstrates how the reference value ensures that taxation is carried out according to more objective and consistent criteria, rather than relying solely on the individual valuations of the heirs.
Resources and tools to check the reference value
Consulting the reference value is an essential procedure for correct asset and tax management.
Its value can be consulted easily – by providing the information on the DNI of the person consulting or with a digital certificate – through the Virtual Headquarters of the Cadastre.
First identify yourself
And then put the reason, the date and the cadastral reference
and click on reference value.
You will receive a document with the reference value of the property.
Please note that the land registry only provides reference values for urbanizable properties, it does not provide values for properties located on rural properties.
It does not provide reference values for commercial premises or tourist accommodation.
There are various tools available that make it easier for taxpayers to obtain and verify this information.
Electronic Cadastre Office
The Electronic Cadastre Office has become a fundamental resource for accessing cadastral information and carrying out various procedures related to the reference value of properties.
This portal is designed to offer an intuitive and efficient user experience, allowing citizens to find the information they need quickly and easily.
Access and usability
Access to the Electronic Cadastre Office is free and available to anyone who needs to consult reference values.
The interface is user-friendly, allowing clear navigation between the different sections of the site.
Users can log in to access specific data on their properties or perform general searches on properties in different locations.
The platform is compatible with mobile devices, making it easy to use at any time and place.
Available tools
- Consult reference values by address.
- Access to the cadastral history of properties.
Information on cadastral modifications. - Online procedures for updating data.
- FAQ section to resolve common doubts.
Help and support through the Headquarters
The electronic Headquarters not only offers tools for consulting the reference value, but also provides support and resources to help taxpayers in their interaction with the Cadastre.
This is especially useful for those who may have difficulties when using the platform or who require assistance on specific issues.
Frequently asked questions
The FAQ section is an excellent source of information, as it addresses the most common concerns related to the reference value and other cadastral aspects.
Users can find answers on how to make queries, what to do in case of errors in cadastral information and the procedure to request clarifications or changes.
Online procedures
The possibility of carrying out procedures online adds a layer of convenience to citizens.
Through the Headquarters, it is possible to manage declarations, file appeals or update cadastral information with ease.
This not only saves time, but also promotes greater efficiency in the relations between the administration and taxpayers.
The digitalization of these processes is an important step towards a more modern and accessible system.
