Paolo Ferri is Italian, an architect, and has lived in Málaga since 2008. He owns three properties in Spain. His home, bought in 2009 for 280,000 €, whose 2025 IBI receipt (the local property tax) shows a cadastral value of 142,000 €. A flat he inherited from his aunt in 2021, which he declared for inheritance tax at 190,000 € and which the Junta, the Andalusian regional government, set at 215,000 € after a check; its cadastral value is 88,000 €. And commercial premises he bought in 2023 for 160,000 €, on which he paid transfer tax on a reference value of 185,000 €, with a cadastral value of 70,000 €. When he was preparing his first Modelo 714, his accountant suggested using the cadastral value of all three, "which is what is always done". He would have declared 300,000 € where the right figure was up to 680,000 €.
The rule: the highest of three
Article 10.Uno of Law 19/1991 requires urban and rural property to be counted "at the highest of the following three values":
- The cadastral value (the official value given to the property by the Catastro, the Spanish property register for tax purposes).
- The value set or checked by the authorities for the purposes of other taxes.
- The price, consideration or value of the acquisition.
You do not choose: they are compared and the highest is taken. The habit of declaring at cadastral value comes from the fact that, for property bought many decades ago, the updated cadastral value is usually higher than the price paid at the time. With recent purchases the opposite happens, and the price is almost always the one that governs.
Paolo's three properties
| Property | Cadastral 2025 | Set or checked | Acquisition | Value to declare |
|---|---|---|---|---|
| Home (bought 2009) | 142,000 € | None | 280,000 € | 280,000 € |
| Inherited flat (2021) | 88,000 € | 215,000 € (check for inheritance tax) | 190,000 € (declared value) | 215,000 € |
| Commercial premises (bought 2023) | 70,000 € | 185,000 € (reference value used for transfer tax) | 160,000 € | 160,000 € or 185,000 €, depending on how the rule is read |
Adding them up on the more cautious reading, Paolo declares 680,000 € in property, compared with the 300,000 € of cadastral value. The difference is not a fine point: it may be what takes him over the tax-free allowance or, together with his portfolio, over the 2,000,000 € of assets that obliges him to file. We look at that in from what amount you have to file.
Step by step with the inherited flat
- Cadastral value on the IBI receipt: 88,000 €.
- Value Paolo declared for inheritance tax: 190,000 €. In an acquisition without payment, that is his "value of the acquisition".
- Value checked by the Junta in the assessment: 215,000 €. It is a value "set or checked by the authorities for the purposes of other taxes".
- The highest of the three: 215,000 €.
If Paolo had appealed against the check and won, the checked value would disappear and the highest of those remaining would govern again. That is why it is worth knowing the status of any check before closing Modelo 714.
The reference value: why it does not always govern
The current wording of article 10.Uno comes from Law 11/2021, the same law that introduced the Catastro's reference value as the minimum base for transfer tax and inheritance tax. That reform added the word "set" next to "checked". Two readings follow from it:
- One holds that the reference value is a value "set" by the authorities and that, where it exists, it enters the comparison even if it has not been used in any of the taxpayer's taxes.
- The other holds that it only enters when it has actually been the value applied in another tax on that property and that taxpayer, as with Paolo's premises, where it was the base for the transfer tax he paid himself.
For Paolo's premises, the second reading also leads to 185,000 €, because the transfer tax was assessed on it. Declaring 160,000 € has a narrower defence. For property bought before 2022, on the other hand, the current reference value was not the value used in any tax paid by the owner, and the debate is more open.
We know of no criterion that settles this point for every case. What we do is explain both readings to the client, the amount that separates one from the other and the risk of an adjustment if the lower one is chosen. Neither of them can be presented as guaranteed.
Cases that fall outside the pattern
Building work in progress. If the property is under construction on 31 December, article 10.Dos requires the amount actually invested up to that date to be counted, plus the value of the plot for the tax. In a building divided into flats, the plot's share follows the percentage in the title deed.
Timeshare and similar arrangements. If the contract gives partial ownership of the property, the three-value rule is applied to that part; if not, the purchase price of the certificates is taken (art. 10.Tres).
Property used in your business. Even if the business keeps accounts, article 11 requires the property used in it to be valued under the rule in article 10, except for property that is stock held by developers or builders. A holiday flat run as a business activity is therefore valued in the same way as any other property.
Property outside Spain. If you are resident, it is included too, and the three-value rule is applied with the figures that exist in that country, which do not always have an equivalent to the Spanish cadastral value. It has its own complications, which we deal with in a property abroad: what value to give it.
Usufruct and bare ownership. They are valued using the transfer tax criteria, starting from the property value resulting from article 10 (art. 20). If you inherited the bare ownership and your mother the usufruct (the right to use the property and its income), each of you declares your own percentage, not the whole value.
Co-owners, mortgages and exemptions
Each owner declares the percentage that corresponds to them, after applying the rule to the total value. The main home is exempt up to 300,000 € per owner, after its value has been set under this same article; we explain it in whether the main home counts. The mortgage does not reduce the value of the property: it is declared separately, as a debt, and with limits when the asset is exempt, as we see in which debts can be deducted.
What papers you need for each property
- The year's IBI receipt, for the cadastral value.
- The deed of purchase, acceptance of inheritance or gift, for the acquisition value.
- Any assessment or value check received for inheritance, gift or transfer tax, with its current status.
- A query or certificate of the year's reference value, obtained from the Catastro's online office.
With those four documents the table is filled in within minutes. You can send them to us through the wealth tax form, and the guide on valuing assets for wealth tax goes over the rules for all other assets. If you have already received a value check in another tax, start with I have received a value check, because it affects what you declare here.
Property valuation, the filing threshold and each region's allowances are part of the Salama Tax page on the wealth tax.