The towns and cities where the cadastral values will change in 2024

Approval of a new Total Value Assessment (i.e. reviewing all properties) could imply either a reduction or an increase in the cadastral value.

In this sense, EuroFunding explains that "although this year half of the towns under review will see a decrease in the cadastral value, (that is, not only will it not go up, but it is more than likely it will go down in comparison to what they were taxed), it is usual a new Total Value Assessment approval means increased cadastral values of all properties in the town, with the tax consequences that this entails".

According to the study, the towns and cities where the cadastral value will fall are El Ejido, Buniel, Briones, Torresmenudas, El Burgo de Ebro and Terrer. For the other six localities, the notifications will increase the cadastral value, "as is the normal Treasury procedure", insists the consultancy firm.

Towns and cities where cadastral values will be partially revised

Added to this list are the towns that are going to undergo partial valuations (i.e. not all properties are valued, but only properties of the same class in one or more areas, discontinuous industrial estates or land, or properties with constructive characteristics that require a singular valuation, such as campsites or golf courses). They are located in provinces such as Valencia, Cantabria, Oviedo or Ciudad Real:

However, it is not yet known which properties will be affected by these changes. The consultancy firm reminds us that the agreement on the approval of the Assessment must first be published, and then a consultation period will be opened. This consultation can be made for 15 working days and has to be done in person at the Cadastre Office by appointment.

However, the number of towns and cities where there will be changes in cadastral values could grow until 1 October, the deadline by which this process will begin.

What are tax assessments? And what are they for?

The study recalls that – according to the regulations – value assessments "are administrative documents that include the criteria, valuation modules, urban planning and other elements required for determining the cadastral value". And their objective is to adjust the cadastral values of properties to market values.

"The reports are carried out when substantial differences become apparent between market values and those that served as the basis for determining the current cadastral values, whether due to a change in planning or other circumstances. They can only be carried out after five years since the entry into force of the previous Assessment and, in any case, ten years from that date," explains Eurofunding. In fact, in some capital autonomous cities, these values have not been revised for more than 20 years, as is the case in Seville (2001), Valencia (1998), Leon (1996), Logroño (1997) and Las Palmas de Gran Canaria (1996), among others.

The process for these cadastral reviews to take effect is as follows: "Once the assessments have been approved, and after a series of formalities, a new valuation is produced for each property in the town or city. All cadastral owners must be notified of these individualised valuations for them to come into effect. Such notification can be made electronically, in person or direct notification by non-electronic means, and will take effect on 1 January of the year following the year in which the notification is made," the report details.

Taxes usually increase

Beyond the theoretical definition and objective, in practice, the value assessments directly affect taxpayers' pockets, as several taxes are related to properties' cadastral values.

The impact is evident in taxes, such as property tax (IBI), "plusvalia municipal", or personal income tax. This is how Eurofunding explains it:

• In the case of property tax (IBI), this increase will not be automatically applied to taxes when it comes into force, as local councils know that it is the most burdensome tax for citizens and that it represents almost 27% of the total revenue of local administrations, so they organise a progressive increase in the taxable base over nine years.
• In the case of the "plusvalia municipal" (municipal capital gains), the regulations also give the local councils the power to establish (or not) a reduction, in this case with a maximum percentage of 60% that can vary during the five applicable years. Apart from these two exceptions, this usual cadastral value increase is directly transferred to the rest of the taxes based on the cadastral value.
• As collateral damage,  updating assessments usually involves updating the Cadastre database and, therefore, the reference value will also be affected, so all taxes that use this fiscal value as a taxable base will be modified. This means that all taxes that use this taxable value as a taxable base, such as Transfer Tax (ITP) and Inheritance and Gift Tax (ISD), will be modified since, if the descriptive data of the property in the database changes, the reference value will change and, therefore, if the property is transferred, it will affect the ITP or ISD, as the case may be.
• In the IRPF for urban properties not assigned in both cases to economic activities nor generating capital yields, excluding the main residence and unbuilt land, 2% of the property's cadastral value is generally calculated as income for IRPF purposes, which is reduced to 1.1% for those properties whose cadastral value has been revised, modified or determined using a collective valuation procedure that has entered into force in the tax period. This is the case of the 12 towns and cities with total revisions in 2002 - or within the ten previous tax periods.

The appeal procedure

The assessments – regardless of whether they lead to a rise or fall in properties' cadastral values – may contain errors and, therefore, can be appealed in economic-administrative proceedings. Both the individualised notification of the cadastral value (which will start in October 2023) and the value assessments themselves (which have just been published) can be appealed, although filing appeals will not automatically suspend enforcement.

"If, once the appeals have been assessed by the different local authorities, they are totally or partially upheld, the taxpayer will have the right to request the refund of undue income from each of the local councils of everything overpaid since the entry into force of the New Value Assessment with the corresponding interest for late payment", explains Eurofunding.

It concludes that "in all these valuation procedures, the most important thing in the affected municipalities is to attend to the notifications by competent land registry technicians and to be able to study and claim within the period established by the regulations". For this, it is "crucial to have the help of a team of experts who study the new valuations for each specific case and carry out all the necessary actions to optimise both the cadastral value and the reference value".