How the revision of the cadastral value will affect the coming year

At present, a total of 39,392,008 urban real estate properties are registered in our country, not including foral territories, whose cadastral value amounts to a total of 2,369,059 million Euros with an average cadastral value per property of 60,141 Euros.

Since the beginning of this year, the reference value has been published, but for the moment only for certain residential and rustic properties without construction with representative crops. This reference value, which aims to fight against tax fraud and avoid the litigiousness that supported the indeterminacy of the previous “real value”, does not seem to have been well received among experts in the field, since no matter how much the Treasury insists that the existence or not of the reference value has no tax relevance by itself, the reality is that the existence of the reference value ceases to be applicable to the verification of values. Many tax experts outside the cadastral world believe that eliminating this possibility generates a great helplessness to the taxpayer. Although there are still many situations to be clarified, the reality is that the announcements for the approval of the parameters for calculating the reference values that will come into force on January 1 of next year have already been published.

In short, the reference value and the cadastral value are part of the cadastral description of the property, but they are different administrative values determined linked to different procedures and have different effects.

What is the purpose of the cadastre?

According to the new draft of the General State Budget Law (LPGE), the Ministry of Finance has set as one of the objectives for next year 2023 the revision of the cadastral value of a total of 825,000 properties throughout Spain.

According to the clarification of the General Directorate of Cadastre on its web page, the original purpose of the cadastre is of a tax nature and aims to facilitate the census of real estate, its ownership, as well as the cadastral value. The latter is an administrative value that corresponds to each property and that allows to determine the economic capacity of its owner.

The cadastral value also affects other taxes whose management corresponds to the State through the State Agency of Tributary Administration (AEAT), as in the IRPF, in which it is determined that the real estate imputed as income with general character, 2% on the cadastral value of the real estate.

How is the cadastral value calculated?

According to the Objectives Plan 2022 of the General Directorate of Cadastre: “The description of real estate, and its valuation, must be permanently updated. This implies a continuous maintenance of the cadastral data. A fully and correctly valued Cadastre is the only one that fulfills its mission, and responds to the principles of generality and tax justice, as set out in the Law”.

To achieve this purpose, the general rule is that the determination of the cadastral value is made by means of the application of the corresponding valuation report. These assessments must be prepared from the moment that substantial differences are detected between the cadastral values and the market values, as a consequence of the approval, revision, modification or development of urban planning or because of a change in the real estate market, which results in a significant deviation from the market values. It should be emphasized that cadastral values may also be altered by means of the updating coefficients published in the General State Budget Law. The purpose of these coefficients is to bring cadastral values closer to the current market value of real estate. Unless there is an error, the draft Law now published does not say anything about this, as was also the case in 2021 and 2022. In the coming year, all the cadastral values of urban real estate will be affected, but only in these five municipalities: Zurgena (Almería), Sant LLuis (Baleares), Buenavista de Valdavia (Palencia), Carcaixent (Valencia) and San Pelayo (Valladolid).

In addition to the aforementioned municipalities, the Tax Authorities are also currently carrying out procedures in other municipalities for partial tax assessments, which, although they do not affect all the properties in a municipality, those that are affected will be seriously affected in their associated taxation. In this case, the affected municipalities are located in Cáceres, Huesca, León, La Rioja, Cantabria, Teruel and Zaragoza.

At this stage of the year in these procedures, the most important thing in the affected municipalities mentioned above is to attend the notifications by competent land registry technicians and to be able to study and claim within the term established by the regulations. For this, it is crucial to have the help of a team of experts to study the new valuations for each specific case and to carry out all the necessary actions to achieve the optimization of both the cadastral value and the reference value.

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