IS THE CADASTRAL VALUE IN SPAIN EQUAL TO THE MARKET VALUE?

No, the cadastral value is not equal to the market value. However, there is an important detail that many owners overlook: the introduction of the Reference Value (valor de referencia).

This is a second value that the tax authorities use in addition to the cadastral value.

Below is an explanation of how this works in 2026. Why the cadastral value remains low: The cadastral value forms the basis for the annual municipal property tax (IBI). Spanish law prohibits this value from exceeding the market value. To build in a safety margin (in case of a housing market downturn), the government deliberately keeps this value at approximately 50% to 70% of the market value.

• Status in Marbella (2026): Although Marbella has slightly increased IBI rates to balance its budget, there is no structural alignment of the cadastral value with actual sale prices.

The “Reference Value”: the value that counts for transactions: Since 2022, Spain has introduced a new system. For taxes related to purchase, inheritance or gifts (such as Property Transfer Tax – ITP), the tax authorities no longer refer to the cadastral value but to the Reference Value. • Market-based approach: This reference value is calculated annually based on actual notarised sale prices.

• The “alignment”: This value is much closer to reality, often around 90% of the market value. • Consequence: If you purchase an apartment for €500,000 and the reference value is €480,000, you pay tax on €500,000. However, if the reference value is €520,000 (for example due to an administrative assessment), you must pay tax on that higher amount, even if your purchase price was lower.

Summary: The government has created a strategic distinction: For annual taxes (IBI): The value remains “low” (60–70%) to keep taxation affordable for local residents. For transactions (Purchase/Inheritance): The value is almost aligned with the market value through the Reference Value.