Cadastral value vs market value in Spain: differences and uses

The valor catastral (cadastral value) and the market value of a property are often confused. They are two completely different things, with different origins, used in different contexts. Confusing them leads to very common tax and valuation mistakes.

Cadastral value: what it is and how it is set

It is the administrative value that the Catastro Inmobiliario (Spain's property cadastre) assigns to each property, based on zone-by-zone value modules for land and construction. It is updated through municipal cadastral revisions, but many town halls have gone decades without one. In rising markets without a revision, it can stand at 20-30% of market value.

Market value: what it is and how it is determined

It is the price at which a property would sell between independent parties under normal conditions. It is determined by supply and demand, and it is estimated through a professional valuation or an automated valuation model (AVM).

What each one is used for

Cadastral value: The basis for IBI (the local property tax), the calculation of the plusvalía municipal (the local tax on the increase in the value of the land) under the objective method, and the imputed income in IRPF (Spanish personal income tax) for second homes. Market value: The sale price and the basis of the mortgage valuation. For ITP (Impuesto de Transmisiones Patrimoniales, the property transfer tax), the taxable base of a property is its valor de referencia (reference value) from the Catastro (or the declared price, if higher); market value only counts when there is no reference value.

Value any property: RadarPro provides AI-based market value estimates. See also how a bank valuation works.