The reference value of the Cadastre, Law 11/2021 on measures to prevent and fight against fraud

Monday, 28 February, 2022

his law came into force on July 11, 2021 but it was not applied until January 1, 2022 that the new reference value of the cadastre is applied, this being the tax base for taxes such as ITP, inheritance tax or donations.
It is no longer the real value of a property that determines the taxable base of these taxes, but its market value, which is determined from the real estate reference value set by the General Directorate of Cadastre.
What happens to properties that do not have a reference value?
In this case, the taxpayer is only obliged to pay taxes for its sale value, which should coincide with the deed. In other words, you must pay the ITP or the ISD, depending on whether it is a purchase or a donation, based on the market value of the home. To do this, you can be guided by the write value of it.

And it is the Treasury who, if they do not agree with what has been declared, must demonstrate that the deeded value does not correspond to the market value. If the Administration decides to initiate a verification of values, they must do so according to the methods provided for in article 57.1 of the General Tax Law.

What happens if the tax is below the reference value of the Cadastre?
That the law is being breached, and it is very likely that the Treasury will initiate a procedure to regularize the taxpayer's situation and force him to pay the corresponding value, and that it will initiate a disciplinary proceeding against the taxpayer.

Does this mean that the reference value of the Cadastre cannot be used?

The law contemplates two ways to challenge this reference value:
1) Taxing according to the reference value and then requesting the rectification of the submitted self-assessment, together with the return of undue income.

2) Taxing according to the deed value, when it is lower than the reference value, and then resorting to the liquidation notified by the Treasury. However, in this case, default interest would have to be paid and the risk of being sanctioned would be added.

How is it shown that the reference value of the Cadastre does not correspond to the market value of a property?
To prove that the reference value assigned by the Cadastre to a property does not correspond to its market value, a taxpayer can resort to the presentation of appraisals, expert reports, photographs of the home or a notarial certificate that justifies its real state, but to date there is no jurisprudence that establishes what would be the admissible means of evidence and that would help us demonstrate that the reference value is not adjusted to the reality of the property.

In the event that a taxpayer does not claim before a result that he considers incorrect, the reference value determined by the Cadastre will acquire firm status.

On the other hand, it is important to bear in mind that if the value of the deed is less than the reference value of the cadastre, the taxpayer must pay their taxes and the notary and property registry expenses, depending on the higher price of the two.

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