The assessed value is relevant to the sale and purchase of real estate and other properties; in fact, the amount of various taxes depends on this value. That is why it is important to know this assessed value in order to have a realistic estimate of a property’s price.
Next, we’ll look at what this value is, how it’s calculated, and why it’s important when doing business with a ranch.
Cadastral value: What is it?
To understand the assessed value, we must first understand that the Cadastre refers to a general registry administered by the government, specifically by the Ministry of Finance.
This public agency is responsible for registering all real estate within the country. Each property is assigned a code and a valuation, which is what we refer to as the assessed value.
Each local government, in consultation with the Ministry of Finance, is responsible for adjusting the assessed value based on certain factors. These include the area’s development and housing prices. As a result, this value may vary from year to year and depending on the local government.
Specifically, this adjustment is made at the beginning of each year. To view the latest update to the Land Registry for each municipality in Alicante for the year 2023, simply click here.
The value of a home according to the Cadastre
The assessed value is determined solely by personnel specialized in this task, based on the valuation report prepared by the General Directorate of Cadastre.
These are the basic criteria used by the government to determine the value of a property:
- Location of the property
- Storage conditions
- Property size
- Antiquity
- Urban development status of the area
- Building materials
- Land value and market value
- History of the estate
As a general rule, these are the factors that the Land Registry takes into account when determining the value of a property, whether it is urban, rural, or has special characteristics.
Ways to calculate the assessed value of a home in Alicante
Since this is a legal piece of information that is frequently used in everyday life, there are several ways to find out the assessed value of a property. The calculation is performed by the relevant administrative body, based on the criteria mentioned above. The Cadastral Office in each municipality has established several contact channels:
- In person
- By phone (902 373 635)
- Through the online service (online portal)
- Regardless of the method chosen, you must provide your personal information and the property’s cadastral reference number. This is a 20-digit code consisting of numbers and letters that serves as a unique identifier for each property.
Another way to determine the assessed value is to use the property tax (IBI) as a starting point. In this case, we need to divide the annual property tax amount by the tax rate applied to real estate by each local government. For Alicante, the rate is 0.591% for urban properties and 0.30% for rural properties.
For example, for a home that pays €140 in property tax per year—which, based on its location, corresponds to a tax rate of 0.591%—its assessed value would be 140/0.591% = €23,729. -
The wide-ranging utility of the assessed value
- Registration of real estate with the Cadastre is mandatory and free of charge. This government regulation benefits both the state and property owners.
- This appraisal serves as a reference when putting a home up for sale. Based on the calculation of the assessed value, the property is assigned a market value.
- It is important to keep in mind that the assessed value must be lower than the market value. If this is not the case, and the difference is significant, you must file a claim with the Cadastre, and it is advisable to seek advice from a real estate law professional.
