The cadastral reference value is a fiscal valuation assigned to each property by the General Directorate for the Cadastre (Dirección General del Catastro), based on actual sale prices in the area. It is updated annually and cannot exceed the market value, as it is subject to a reduction coefficient.

Since 2022, under Law 11/2021 on anti-tax fraud, this reference value has been established as the official minimum basis for calculating various property-related taxes. In other words, the Spanish Tax Agency (Hacienda) uses the cadastral reference value as the taxable base for property purchases—whether flats, villas, parking spaces, etc.—for both domestic and international buyers, as well as for other taxes such as Inheritance or Gift Tax.

Taxes When Purchasing a Property

When buying a property in Spain, several key taxes must be considered:

• ITP (Property Transfer Tax): Applies when purchasing a second-hand property. It is a regional tax governed by the autonomous communities.
• VAT (Value Added Tax): Applies to new-build properties. The general rate is 10% of the purchase price (reduced to 4% for newly built subsidised housing, or VPO).
• AJD (Stamp Duty): This tax applies to the notarial execution of the deed. For new-build homes, it is calculated on the same taxable base as the ITP.

In all these cases, the taxable base is the greater of the agreed sale price and the cadastral reference value. This means that Hacienda will require tax to be paid on the higher value. For example, if a second-hand flat is purchased below its reference value, the ITP will be calculated on the reference value instead of the actual price. Conversely, if the agreed price exceeds the reference, taxation is based on the sale price. This system prevents the artificial undervaluation of properties to reduce tax liabilities. In summary:

• ITP (for second-hand properties): Taxed on the higher of the sale price or reference value.
• New-build homes: VAT (10%, or 4% for new VPO housing) plus AJD, calculated on the higher base between price and reference.

Sale Price vs. Cadastral Reference Value

In practice, Hacienda will always use the higher of the two figures as the taxable base. If you buy below the cadastral reference, you’ll still pay tax according to that reference. If you buy above it, you’ll pay based on the actual price. This rule applies equally to all buyers—whether residents or non-residents—and to all types of properties.

However, if you believe the reference value assigned to a property is unfair or excessive, you may file a claim with the Tax Agency after initially paying the applicable tax, requesting a reassessment.

Subsidised Housing (VPO)

Even though subsidised housing (Vivienda de Protección Oficial, VPO) has a legally capped maximum sale price—often below market value—it is still subject to the cadastral reference rule. Spain’s Directorate-General for Taxation has confirmed that when buying a VPO, the ITP must be calculated using the cadastral reference value.

In other words, Hacienda requires tax to be paid based on the reference value (which may be higher than the capped sale price), and only afterwards can the buyer request a refund if the amount paid is excessive. This ensures that the correct tax is always collected, even for subsidised housing.

Advice for Buyers

• Check the cadastral reference value before signing: Visit the electronic portal of the Cadastre to find the reference value of the property you are interested in purchasing.

At CASAVIVA Ibiza Real Estate, we provide clear and transparent information so you can make well-informed decisions. Know the reference value of your property and plan your purchase taxes with the support of our experienced professionals.