Warning! Please be careful when buying a bargain or low priced property in Alicante or Costa Blanca areas like Torrevieja because there is a reference value established for tax purposes for every property in Spain.
The reference value is a crucial concept used to determine the amount of taxes associated with property transactions, such as Stamp Duty, Inheritance, Gift and Transfer Tax. It’s a value that is intended to be an objective and reliable measure of the property’s worth, and it plays a significant role in calculating the taxable base.
In Spain, the reference value is established based on certain criteria outlined by legal regulations. Here’s a summary of how this figure is determined:
- Market Value Doctrine: The Spanish Supreme Court has established that, when there is a market for the dwelling in question, the “real value” coincides with the “market value.” In other words, the objective is to assess the value based on prevailing market conditions.
- Cadastral Data Analysis: The Directorate General of Cadastre (Dirección General del Catastro) is responsible for determining it. They use data from the Cadastre, which is a public registry that provides information about properties. The analysis includes the prices reported by public notaries in real estate sale and purchase transactions.
- Comparison and Certification: By analyzing market data and cadastral information, the Cadastre aims to determine it objectively and within the limits of the market value.
- Taxable Base Determination: When a property transaction takes place, if the value declared by the parties involved or the agreed-upon price is higher than the reference value, the higher of these two values is taken as the taxable base for the calculation. If there is none available or certified by the Cadastre, the taxable base can be determined based on the value declared by the parties, the agreed price, or the market value.
- Minimum Taxable Base: The figure is established as the minimum taxable base for Transfer, Inheritance, Gift or Stamp Duty (Impuesto de Transmisiones Patrimoniales, Actos Jurídicos Documentados, Impuesto sobre Sucesiones y Donaciones).
- Checking the Reference Value: To check it, individuals can visit the Electronic Headquarters of the Cadastre (www1.sedecatastro.gob.es). This online platform allows taxpayers to certify the figure on a specific date. Access to the consultation requires identification using the National Identity Document, digital certificate, or digital signature.
The reference value is a crucial concept used to determine the amount of taxes associated with property transactions, such as Stamp Duty, Inheritance, Gift and Transfer Tax. It’s a value that is intended to be an objective and reliable measure of the property’s worth, and it plays a significant role in calculating the taxable base.
In Spain, the reference value is established based on certain criteria outlined by legal regulations. Here’s a summary of how this figure is determined:
- Market Value Doctrine: The Spanish Supreme Court has established that, when there is a market for the dwelling in question, the “real value” coincides with the “market value.” In other words, the objective is to assess the value based on prevailing market conditions.
- Cadastral Data Analysis: The Directorate General of Cadastre (Dirección General del Catastro) is responsible for determining it. They use data from the Cadastre, which is a public registry that provides information about properties. The analysis includes the prices reported by public notaries in real estate sale and purchase transactions.
- Comparison and Certification: By analyzing market data and cadastral information, the Cadastre aims to determine it objectively and within the limits of the market value.
- Taxable Base Determination: When a property transaction takes place, if the value declared by the parties involved or the agreed-upon price is higher than the reference value, the higher of these two values is taken as the taxable base for the calculation. If there is none available or certified by the Cadastre, the taxable base can be determined based on the value declared by the parties, the agreed price, or the market value.
- Minimum Taxable Base: The figure is established as the minimum taxable base for Transfer, Inheritance, Gift (https://spanish-lawyer.org/donation-in-spain/Tax) or Stamp Duty (Impuesto de Transmisiones Patrimoniales, Actos Jurídicos Documentados, Impuesto sobre Sucesiones y Donaciones).
- Checking the Reference Value: To check it, individuals can visit the Electronic Headquarters of the Cadastre (www1.sedecatastro.gob.es). This online platform allows taxpayers to certify the figure on a specific date. Access to the consultation requires identification using the National Identity Document, digital certificate, or digital signature.
