Learn all about the new Land Registry reference value
November 10th, 2021 |
In the BOE of last July, a law was published that, among many other things, inserts various modifications in the taxes that affect real estate. Among these modifications, it brings a reform that allows the reference value of the Cadastre to become the taxable base of property taxes, in the case of real estate.
The Treasury will use the new reference value of the Cadastre calculated by the Cadastre as the taxable base of the patrimonial taxes. In this way it will try to end the debate on the value of real estate in sales, donations and inheritances.
In this article we will tell you about this new value of a property, and how this reform in real estate can affect you in a personal way, questioned by the Spanish Public Treasury.
Read carefully to find out how it can interfere with your investments, such as new developments that Homewatch offers you as a safe value and great opportunity.
What is the reference value of a property?
The reference value of a property will be a value imposed by the Cadastre that will be used as a reference to calculate the taxable base of certain taxes on real estate, such as ITP or ISD, except if the citizen declares a higher value or that the price agreed in Transmissions is higher, in both cases the higher value would be applied. Although according to the Cadastre, the reference value will not have any effect on the IBI or on other different taxes.
This new reference value will try to reflect a figure close to the market value, but somewhat lower; yes, it will be higher than the cadastral value.
The data, of this new value of a property, will be public. Therefore, it will be possible to know each time the property’s cadastral data is consulted.
In the future, it is expected to also use the reference value of the Cadastre for the Wealth Tax, but it will only be for properties acquired as of January 1, 2022, not for properties that appear as pre-existing assets.
How is this value calculated in the Ministry of Finance?
It is the Cadastre that will define this reference value of the properties each year. This value will be calculated from the price analysis of the sales that have been made, before a notary public.
It is not yet clear how the characteristics of each property will be taken into account. At the moment there is talk of different calculation modules for “homogeneous territorial areas of valuation”. According to these modules, the annual resolution of the Cadastre will detail how to make each reference value of each individual property.
The owner of the property will be able to access the criteria that has been established to establish the reference value of their particular property.
How does the new reference value of the cadastre affect?
This new value of a property will determine the taxes that must be paid by those who buy a second-hand home or inherit or receive the donation of a property. It is warned that this change will immediately bring an increase in the taxation of the different taxes that the new reference value of the Cadastre directly affects.
In this way, the citizen will not pay taxes for the amount that the house has cost him, but for its value, which is marked annually by the Cadastre. Due to this, the regional Treasury will no longer make visits to check the property sold and its state of conservation, to know if the taxpayer is paying the correct value.
As we have mentioned previously, this new reference value will affect various taxes, as it will be the tax base of the Tax on Patrimonial Transmissions and Documented Legal Acts (ITPAJD), and also the Tax on Inheritance and Donations (IsyD).And it will also affect the Wealth Tax, although not in its tax base.
You can visit this link to learn more about how much real estate owners currently deduct.
In such a way that this new value will be the minimum value for which you will have to pay taxes when buying a home, or inheriting a property. If it were the case that the interested party had deeded the property for a lower value, the Treasury will oblige him to pay taxes for the value indicated by the Cadastre in his new valuation.
Article by Vanesa Mena, Nov 10, 2021