There is a small piece of paper, which almost everyone throws away, on which a large part of what is paid on a sale depends: the IBI bill, the annual municipal property tax. It gives you the valor catastral (the official value set by the Catastro, the land registry for tax purposes), and the breakdown of that value gives you the share the land represents of the total. That share decides the actual-gain method of the plusvalía municipal (the town hall's tax on the increase in land value), goes into the depreciation of a let property, and comes up every time land has to be separated from building. This guide explains where that figure is, how it is read and what to do when it does not add up.
What the valor catastral is and what it is made of
The valor catastral of an urban property is determined from the data held by the Catastro and is made up of the cadastral value of the land and the cadastral value of the building. It is set according to the town's ponencia de valores (the municipal valuation report) and cannot exceed market value, to which end the market reference coefficient set by the rules is applied.
| Component | What it reflects |
|---|---|
| Land value | That of the ground, taking account of its location, planning circumstances and suitability for building |
| Building value | That of the construction, according to its cost, use, quality, age and state of repair |
| Valor catastral | The sum of the two |
For a flat, the land value shown is the part that belongs to that unit according to its share in the building, not the whole plot. That is why in a block of many storeys the land usually weighs little in proportion, and in a detached villa on a large plot it weighs a great deal.
Where to find the breakdown
- On the IBI bill, when the town hall itemises it. Many print the two lines separately; others show only the total valor catastral, and then you have to go to the source.
- On the Catastro's online office (its Sede Electrónica), where the data can be consulted and a descriptive and graphic cadastral certificate obtained. To see the protected economic data you have to identify yourself as the owner with an electronic certificate or Cl@ve (the Spanish government's electronic identification system).
- At the Catastro's regional offices (the Gerencias), in person, with the cadastral reference and proof of ownership.
- In the escritura, the public deed signed before a notary, which gives the cadastral reference but normally not the breakdown of the value.
It is not the total valor catastral: it is the percentage the land represents of the total. Land value divided by valor catastral, with the result as a percentage. That number is the one used later, and it is worth noting it down with the year it belongs to, because it changes.
What that percentage is used for
| Use | How it comes in |
|---|---|
| Actual-gain method of the plusvalía municipal | The difference between the transfer value and the acquisition value is multiplied by the land share, because the tax falls on the land and not the building |
| Objective method of the plusvalía | It starts directly from the cadastral value of the land at the time the tax falls due |
| Depreciation of a let property | The depreciation base excludes the land, and the Catastro's proportion is the one used to separate it from the acquisition cost |
| Imputed property income | It is calculated on the total valor catastral, with rules of its own depending on whether there has been a revaluation |
The consequence is that the same property can come out much dearer or much cheaper in plusvalía than its neighbour, for the simple reason that the weight of the land is different. Two identical flats in neighbouring towns, with valuation reports from different years, can have very different proportions.
An example of why this decides the method
A sale with an increase of 30,000 euros between the purchase price and the sale price, and a rate of 25 % invented for the example (each town's rate is in its bylaw):
| Weight of the land | Base under the actual-gain method | Tax at 25 % |
|---|---|---|
| 15 % | 4,500 | 1,125 € |
| 30 % | 9,000 | 2,250 € |
| 55 % | 16,500 | 4,125 € |
| 80 % | 24,000 | 6,000 € |
The same gain, the same rate and four different bills. That is why the IBI bill is the first document we ask for: without it there is no way of knowing whether the actual-gain method is better, and the actual-gain method is precisely the one town halls do not calculate on their own initiative.
When the figure does not add up
Four situations come up again and again.
- The land value is zero or close to zero. It happens with some properties and certain units, and it has striking effects: if the land has no value, the objective method may produce a base of zero. It is a case worth analysing with the bylaw in front of you before taking anything for granted.
- The Catastro's floor area or use does not match reality. An extension to the home that was never declared, commercial premises turned into a dwelling, a storage room split off. The way to fix it is a declaration of cadastral change or, depending on the case, the procedure for correcting discrepancies, which is handled by the Catastro and not by the town hall.
- The valor catastral is out of proportion to the market. It happens in towns with old valuation reports or, conversely, with recent revaluations carried out at a different moment in the market. Challenging a valuation report has its own deadlines and its own procedure, and those deadlines are short from the date it is approved.
- The bill arrives in the name of someone who is no longer the owner. The tax falls due on 1 January and is owed by whoever was the owner on that day, so the bill for the year of the sale may still come in the seller's name. The change of owner in the Catastro is usually made from the information the notary sends, but it is worth checking that it has happened.
Cadastral and tax procedures run along separate tracks. Starting a cadastral correction does not by itself halt a plusvalía assessment or an IBI bill in the voluntary payment period, and stopping payment while it is disputed opens the enforcement period with its surcharge. If payment has to be suspended, it is requested, reasons are given and, normally, a guarantee is provided.
The valor catastral to use is the one at the date the tax falls due
For the plusvalía municipal, the land value taken is the one set at the time the tax falls due, that is, on the date of the transfer. Not today's, if the sale was two years ago, nor the one on whichever bill is closest to hand. And the law covers the case of land that had no valor catastral set at that moment, allowing the town hall to issue the assessment once the value has been set.
For the same reason, when rebuilding the depreciation of a property that was let for several years, the valor catastral for each year has to be used, not a single one for all of them. It is tedious work but it is what supports the figure: it is explained in the guide on minimum depreciation.
What to keep, and for how long
- One IBI bill for every year the property was let.
- The bill for the year of the transfer, which is the one that governs the plusvalía.
- The descriptive and graphic cadastral certificate if there has been building work or other changes.
- Any cadastral correction decision, with the date from which it takes effect.
That is four documents and they fit in one folder. Rebuilding them once the property has been sold and the bank account that paid the bill by direct debit has been closed takes weeks.
If you would rather not deal with this, we find the breakdown, work out the land share for each year that is needed and apply it where it belongs, both in the plusvalía and in the income tax gain. It starts with the plusvalía municipal intake form. And one honest point: we can read and use properly what the Catastro says, and identify when there are grounds to dispute it; what is not in our hands is assuring you that a cadastral correction will succeed.
The garage, the storage room and the shop: three separate cases
When the sale includes more than one registered property, there is not one plusvalía: there are as many as there are properties with their own cadastral reference being transferred. Each one has its own valor catastral, its own land split and its own date of acquisition, and therefore its own calculation.
| Item | What usually happens |
|---|---|
| A parking space with its own cadastral reference | It is calculated separately. If it was acquired on a different date from the home, the years elapsed are different too |
| A garage or storage room as an inseparable annex to the home | It shares the cadastral reference and goes into the same calculation |
| Commercial premises | They usually have a very different land weight from the homes in the same building, because of their position on the ground floor |
| A detached house with a plot | The land weighs much more than in a flat, and the objective method tends to become more expensive |
That is why the fee for our work in this line is set per property and not per transaction: it is not a pricing question, it is that the full calculation has to be done as many times as there are properties. And that is also why the first document we ask for is the IBI bill for each of them, not just the one for the home.
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