Reference value: What it is and how to optimize it

On January 1, 2022, the Treasury, through the General Directorate of Cadastre, determined a new value, apart from the cadastral value, called “reference value of the cadastre” and the parameters by which the new values of 2023 will be assessed have already been published.

What does this new term refer to?

After the approval of Law 11/2021 of July 9, 21, on measures for the prevention and fight against Tax Fraud, this new concept of reference value was defined, an objectively determined value for each real estate property based on the data contained in the Cadastre that corresponds to the most probable price for which a property could be sold between independent parties and free of encumbrances. Therefore, this concept is established as the minimum taxable base for the Transfer Tax and Stamp Duty (ITP and AJD) as well as Inheritance and Gift Tax (ISD).

It should be noted that this new Law modifies the current Cadastre Law, adapting its regulation and adding that said reference value will be limited to the market value, which may not be exceeded. For this purpose, a reduction factor will be applied in its determination.

On the other hand, it is important to point out that in the case of the Wealth Tax this reference value will affect the properties acquired as from 2022 but, in no case, the pre-existing wealth. Likewise, it must be taken into account that this new value does not modify neither the Real Estate Tax (IBI) nor the tax on the increase in the value of urban land (IIVTNU or plusvalía).

The Cadastre, with its questionnaires of “frequently asked questions” and the General Directorate of Taxes, through various binding consultations, have been trying to shed some light in this first year of start-up. However, from our point of view as cadastral experts, we observe a great lack of knowledge on the part of the affected sectors.

Is it possible to optimize this value?

For the calculation of the reference value, all the descriptive data of each urban property to be considered will be those contained in the Real Estate Cadastre, which will enjoy the presumption of certainty established in the regulations. This calculation will be made according to the construction and location characteristics at the close of each fiscal year, so that any slightest error on the part of the administration between the physical reality and the imputation of the construction characteristics or in the assignment of the homogeneous territorial scope of valuation according to the uses that correspond to the activities defined by the Cadastre, will mean that the reference value is not the one that corresponds to the real estate reality of your property and can lead to considerable increases in the liquidation of taxes.

Therefore, it becomes especially relevant and essential to count on the help of experts such as Euro-Funding that, through technical advice, allow the optimization of this and other resources.

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