Architect. Master in Integrated Project Management. Master’s Degree in Building Pathology and Expert’s Activity. Candidate to the Corps of Architects of the Public Treasury (Official College of Architects of Madrid). Specialized in the fiscal optimization of IBI, IIVTNU and other tax figures. Cadastral and tax management. Valuation of real estate.
The reference value has undoubtedly attracted a lot of attention in the last few months in the tax field, however, every 1st of January, coinciding with the date of accrual of the IBI, the coefficients for updating the cadastral values, which are published with the General Budget Laws, reappear in everyone’s mind.
As a starting point, the cadastral value may never exceed the market value and for this purpose a market reference coefficient, RM, of 0.50 is applied to the cadastral valuation.
The objective of the application of the updating coefficients is to bring the market values, which served as a basis for the Cadastre when it determined the cadastral values, closer to the current market values, thus covering the small upward or downward differences that have been experienced.
But are we talking about an increase in the cadastral value? The coefficients that are approved can either increase or decrease cadastral values.
This will depend fundamentally on the year of approval of the municipality’s value assessment and the reality of the real estate market. For those municipalities whose value assessments were approved in years with high market values, the coefficients will be decreasing; while, on the contrary, for those in which the value assessments were approved in years with low market values, the coefficients will be increasing.
It depends, we are talking about different but related things. The determination of tax rates is the exclusive competence of each local council, while cadastral management is the exclusive competence of the Cadastre. The application of these coefficients, within cadastral management, can lead to an increase (or decrease) in the cadastral value of the properties that constitute the taxable base of IBI.
An increase in the tax base by updating cadastral values is compatible, for example, with a reduction in tax rates (tax management), so that, although the tax base is increased, the tax liability is reduced.
Therefore, the IBI bill will be affected if a decrease/increase in cadastral values is not accompanied by a decrease/increase in tax rates.
No. Firstly, municipalities wishing to do so must first apply to Cadastre for its application, which will be granted once the Directorate General of Cadastre has verified that the requirements of the law have been met.
In such cases, different update coefficients will be approved depending on the year of approval of each municipality, so that, for example, for 2020, three standard coefficients were approved for a total of 1,177 municipalities, two of the coefficients were increases and one was a decrease.
It is important to know which coefficients were approved for this year and which municipalities are affected.
For this year, the General Budget Law has not published any updating coefficients. The last ones published have been for 2020 (in this link you can consult the list of municipalities for 2020, and in this other link, which leads to the Royal Decree-Law 18/2019, you can consult in article 6 the specific coefficients for 2020), so we have been two years without updating the cadastral values.
Finally, many users wonder how to know if the cadastral value of their property is correct. The only way to know if my property is correctly valued is by means of a cadastral review by a technician specialised in Cadastre. At Euro-Funding we analyse the taxation associated with the properties and the economic activities that are carried out in them to determine the possibilities of reduction of: IBI, IAE, ICIO, Plusvalía (IIVTNU), etc.
The taxable amount due to the updating of cadastral values is compatible, for example, with a reduction in tax rates (tax management), so that, although the taxable base is increased, the tax liability is reduced.
Therefore, the IBI bill will be affected if a decrease/increase in cadastral values is not accompanied by a decrease/increase in tax rates.
At Euro-Funding we analyse the taxation associated with properties and the economic activities carried out on them to determine the possibilities of reducing: IBI, IAE, ICIO, Plusvalía (IIVTNU), etc.
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