New reference values for urban real estate

On the 1st of January of this year, the new regulations on the reference value of urban real estate came into force.

On the 22nd of December last year an announcement was published in the BOE (Official State Gazette) by the General Directorate of Cadastre on the elements required for the determination of the reference values of urban real estate for the year 2022.

These ‘new reference values’ are of tremendous importance as they are the ones that will be taken as the basis for calculating the amount of Transfer Tax and Gift and Inheritance Tax.

The new reference value of real estate is calculated by the Cadastre through an analysis of the sales prices of properties provided by notaries and Property Registries. At least in theory, this reference value will always be lower than the market value of the real estate, but this will not always be the case.

This reference value will not affect the cadastral value of the properties and, therefore, will have no effect on Real Estate Tax (IBI) nor on the rest of the taxes that have the cadastral value as their taxable base. Nor will it affect Wealth Tax with regard to properties acquired before 1 January 2022.

When and how will these reference values be applied?

The so-called ‘reference value’ will always be applied when calculating the amount to be paid for Transfer Tax, as well as for Gift and Inheritance Tax, except when:

(a) There is no reference value for a given property.

b) The declared value or price of the property is higher than the reference value, in which case this will be taken as the taxable base for calculating the tax.

How can I find out the reference value of a property?

The reference values of properties can be consulted at the electronic headquarters of the Cadastre. To make the consultation, the interested party must identify themselves, using the details of their National Identity Document, with a digital certificate, or via Cl@ve. The consultation may also be made by telephone through the Cadastre Hotline or through the Cadastre Offices, after requesting an appointment. To do so, the interested party must identify themselves, using the details of their National Identity Document.

Alternatively, through ALTEAINVEST, the interested parties can easily and quickly find out the reference value of their property or of the property they intend to purchase, as well as obtain the corresponding certificate of such reference value. This service will be completely free of charge for our clients and will cost only 30 € plus VAT for other interested parties.

What happens if I do not agree with the reference value of my property?

Although theoretically the reference value should be at least 10% lower than the REAL value of the property, it is possible that on some occasions, due to certain circumstances, this may not be the case.

In these cases, if the interested party considers that the reference value is detrimental to him/her, he/she can request the rectification or file an appeal for reconsideration with the Tax Administration, or a contentious-administrative claim with the Economic-Administrative Court against the liquidation that, if applicable, is made by the Administration in charge of the tax.

Of course, the professionals at ALTEAINVEST will always be ready to help our clients resolve these types of cases.

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