The cadastral value of a property is an administrative record under the authority of the Ministry of Finance and Public Administration, whose purpose is to register all properties, whether rural or urban.
How is the cadastral value of a property calculated?
The cadastral value of a property is calculated by taking the following factors into account:
- The location of the property.
- The characteristics of the building, such as its condition, age, plot characteristics, use, level of upkeep, and the state of any refurbishments, among other factors.
- The construction costs of the property.
- The market value of the property, including the value of the land, the building itself, production costs and the profits derived from property development activity.
Why is the cadastral value of a property so important?
The cadastral value of a property is key because many taxes are based on it. In other words, depending on whether the cadastral value is higher or lower, the owner may pay more or less tax. The main taxes that use the cadastral value of a property as a basis are:
- IBI: Property Tax.
- IRPF: Personal Income Tax.
- IP: Wealth Tax.
- ISD: Inheritance and Gift Tax.
- Municipal capital gains tax: Municipal Tax on the Increase in Value of Urban Land.