Do you want to sell your property or do you want to know how much tax you will have to pay for owning it? If your answer is yes, you will need to know two fundamental concepts: the cadastral value and the market value. In this article we tell you the differences between both values, how they are calculated and how to optimise them.
What is the cadastral value of a property?
As you may already know, taxes related to the ownership of a property (e.g. property tax or municipal capital gains tax) are calculated on the basis of the cadastral value. The cadastral value is an administrative value obtained through a series of calculations established by law and by the municipality where the property is located. The cadastral value is included in the real estate cadastre, which is an administrative register that depends on the Ministry of Finance and determines the physical, economic and legal characteristics of the real estate.
What is the market value of a house?
The market value is the estimated amount for which a property would be transferred between the buyer and the seller in a completely free sale and purchase transaction. The market value is influenced by various factors such as the age of the property, the state of conservation, the surface area, the communication by public transport, the quality of the construction materials, the location, the common areas of the building, the energy efficiency or the legal status of the property, among others.
Differences between the cadastral value and the market value of a dwelling
As we have seen in the definition of the cadastral value and the market value of a property, they are concepts that are differentiated by the following elements:
– The variation over time. The market value is influenced by aspects such as the demand for a specific property or the economic situation of the country or the real estate market. The cadastral value is established on the basis of another series of parameters and does not vary in the same way.
– How the value is determined. The regulations applicable to the real estate cadastre establish the technical rules that are used to determine the cadastral value and it will be qualified technicians who define this value. In addition, cadastral values are revised periodically according to the coefficients defined by the General State Budget. However, the market value will be influenced by the elements we have seen above, such as the market situation or the surface area of the property.
– The purpose of each value. The cadastral value is a value for tax purposes that is used to calculate the property tax or the municipal capital gains tax, among other taxes. The market value is established in order to have a price for a property in a purchase and sale transaction and to determine the money needed for the mortgage by the buyer.
How to calculate them?
The cadastral value is calculated considering elements such as the location of the property, the urban circumstances of the land, the renovation works that have been carried out, the age of the building or the historical or heritage value of the building.
The easiest way to know the cadastral value of a property is through the IBI receipt, which shows the cadastral value, the value of the land and the value of the construction. Another way of finding out this value is by consulting the Real Estate Cadastre. As the owner of the property you can request directly or through an authorised person, providing the cadastral reference number, a cadastral certificate showing the cadastral value of the property. For this request you can go in person to the headquarters of the Cadastre or do the procedure through the electronic headquarters of the Cadastre.
The market value is generally determined by the seller of the property with the advice of experts in the real estate sector. If an adequate market value is established, the property will sell faster because there will be more buyers, however, if the market value is too high, it will take a long time to sell because no interested buyers will be found.
To calculate the market value, a market valuation can be obtained from a real estate consultant or by comparing several properties of the same characteristics listed on real estate portals.
Can values be optimised?
Yes, both values can be optimised. Optimising the cadastral value is essential to avoid paying more tax than you should. If the Catastro Inmobiliario has incorrect information about your property, you may pay more IBI than you should. One of the signs that should alert you is that the cadastral value is higher than the market value. In this case, you should request a cadastral certificate and check that all the information is correctly recorded by the Cadastre (type of property, surface area, etc.). For example, it may happen that you have made an alteration to the property and you have not informed the Cadastre or that the type of land is not correctly recorded in the land registry. In these cases, a process known as cadastral regularisation can be carried out to ensure that the real situation of the property is in accordance with the Cadastre data.
The optimisation of the market value can be carried out by comparing this value with that of other properties with similar characteristics. In this way we will know if the price for which we want to sell a property is correct or if it is too high compared to the market average. The comparison of values should be carried out periodically, as the market situation may change over time.
How is the market value of a second-hand property in Barcelona calculated?
If you want to sell your flat in Barcelona and you don’t know how to establish the market value, here are the steps to follow:
– Ask a technician to take a measurement. It is important that you know the real surface area of the property in order to establish the price. In addition, it is advisable to request a simple note from the Land Registry to verify if there are any discrepancies with respect to the real surface area.
– Analyse the price per square metre in your area. To see the price per square metre you can access real estate portals, request a report from a consultant and analyse the official data from Barcelona City Council.
– Adapt the price to the specific characteristics of your property. To determine the market value of your home, you should consider specific aspects such as height, orientation, improvements you have made, etc.
Once you have done this, you will obtain a market price. When you put your property up for sale you will be able to check, depending on the interest and offers made by buyers, whether the price is the right one or whether it needs to be modified.
If you need help from real estate experts in the residential market in Barcelona and Sant Cugat, contact PRODDIGIA and our team of experts will help you establish the market value of your property so that it sells quickly and you can obtain maximum profitability.
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