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Monday, January 9, 2023
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What is the data discrepancy with the Cadastre and how to solve it

Have you made changes to your property in Spain and have not notified the Cadastre? You could have problems with your taxes and worse, problems when selling your property. We tell you what the data discrepancy with the Cadastre is and how to solve it!

In 2022 the Spanish central government approved the new Cadastre Law. The Cadastre is the body that, directly dependent on the Ministry of Finance, regulates the value and characteristics of real property. It is also the Cadastre that provides the cadastral value of a property: one of the economic characteristics of its cadastral description and that marks the sale price of a property.

And here discrepancies can arise: not all the properties have yet been reviewed with the new cadastral value, nor have all the properties registered their data correctly. This data discrepancy can be a problem for the sale of your house or apartment... And if it were your case?

Imagine that you have put the sell your property in 2022. On that date your property had not yet be10en verified with its new cadastral value and you are selling your house at a price lower than its cadastral value in 2023, the date on which your property has already been reviewed. That basically means that if you sell your property in 2023 below the price marked by the Catastro, you can be accused of wanting to avoid your real tax responsibilities.

If you have any doubts about the marked price, we recommend that you read our article Cadastre Law: what you should know if you want to sell your house or buy a home Even so, your problem could be worse:

But let's go to what interests us in this article: What is the data discrepancy with the Cadastre and how to solve it. Continuing with our example, you could have avoided notifying changes in the surface of your property to the Cadastre. Result, for example, of a rehabilitation improvement to, precisely, increase the sale price of your property. Failure to notify cadastral data would cause the so-called data discrepancy with the Cadastre.

What is the data discrepancy with the Cadastre?

Let's see, then, what is the data discrepancy with the Cadastre when, for example, we do not notify the update of the characteristics registered in the cadastral file. This means that the real data has not been notified to the DGC (General Directorate of Cadastre) and that, therefore, there are no tax changes related to the cadastral value. But it also means that you have shirked your responsibilities as a property owner. How can we fix it?

The data discrepancy basically occurs with modifications that affect the dimensions or characteristics of the property, since they are not always notified (unlike changes of ownership that are notified by the notary or registrar) or they do not appear modified yet at the time of the sale.

Are you determined to sell your house or flat? Review this section and if necessary, don't waste time and update it in the Cadastre!

Initially, the person who initiates the data discrepancy process is usually the administration itself once the discrepancy has been demonstrated; however, the affected party can also notify the Cadastre and request the opening of the file for its correction. Thus begins the procedure for correcting discrepancies that allows registering this cadastral alteration so that it is truly reflected in its reference value. And, therefore, you can legally sell your home at the price you consider.

To take into account: If it is the Cadastre that launches a provincial review and detects anomalies, you can be penalized, since it will be considered a deception on your part to avoid increases in your IBI by having increased the value of your property. And as we said at the beginning of this article, with the new Cadastre Law, all properties are under the cadastral regularization process and perhaps you still have time to request the cadastral revision in specific cases.

The procedure for correcting discrepancies is regulated in art. 18 of the TRLCI and it is very different from the error rectification (more common to correct measurement errors and resolve discrepancies between Cadastre and deeds) and in which the required period of 15 days to present allegations is not provided. In both cases, the new cadastral value can have retroactive effects or be applied from the same day of the new resolution. 

Reasons for requesting the cadastral review:

  • The most common case is an error in its description, n, surface or boundaries of a farm. This implies that the data provided by the Cadastre and the property registry do not match and, furthermore, the market value is not adequate. On the other hand, this fact has tax implications and in the event of a sale you must make sure that you do not sell above or below the indicated price.
  • But it could also be that the cadastral value of your property It has not been updated for many years and, therefore, the price at which you want to sell is considered lower than the market value, so the review should also be requested in this case.

What are the differences between Cadastre and Land Registry? The Property Registry depends on the Ministry of Justice and its function is to confirm the ownership or who is the owner of this house. For its part, the Cadastre is an administrative body that acts as a census on the location and characteristics of a property, depending on the Ministry of Finance and for tax purposes.

Remember that... In order to prove the need for modification, you must have the services of a professional technician (probably a surveyor) but also the fees of the relevant notary to carry out the modification and updating of the deeds in the property registry.

And who can request these verifications of cadastral alterations?

  • In general, notaries and property registrars, the town halls themselves or the Tax Agency are in charge of updating any changes in the Cadastre. They can also intervene in the notarial records that include these modifications of the property and are added to the public documents of the estate.
  • But you can also request it as the owner and once again, hiring the services of a technician professional who performs the necessary verifications that provide the necessary evidence for the Procedure for the correction of cadastral alterations. The amount of their services can be variable (300 euros on average) but it is a very low cost given the importance of the procedure and the consequences that it can bring you if you do not modify it, since in third place...
  • It may be the Cadastre itself that initiates the Procedure to rectify cadastral alterations after detecting changes in one of its regularization processes (we remind you that they are still in process and that you can check the areas in the BOE) in this case, You will have 15 days from notification to present your allegations.
  • Finally, we must remember that the IBI derived from the Cadastre is a dual control tax shared between local entities and the Ministry of Finance, being also the town halls who can start reviews of collective valuations, since they are empowered to control the effect of the IBI through various fiscal mechanisms.

In any case, the modifications made through the discrepancy correction procedure are effective from the day after the date on which they are agreed.

The main problem for sellers and buyers is that if they do not agree with the data provided, the sale-purchase transaction can become a loss of money for one or both parties, but not everything is lost and you can also incur tax fraud and without knowing it. 

The cadastral reference value, cadastral value and value of market... How are they different?

  1. The cadastral reference value is public data that is updated every year through territorial areas where an average price is established for similar property types. It is extracted from the real estate purchase and sales history of a specific area. The reference value cannot exceed the market value, since they do not mean the same thing. The reference value is calculated based on historical data, while the market value corresponds to a commercial, temporary and variable casuistry. Lastly, the reference value is the basis for calculating the Property Transfer Tax, Documented Legal Acts and/or the Inheritance and Gift Tax.
  2. For its part, the cadastral value, as we already know, is the valuation of a specific real estate property accessible only to its owner and which affects the municipal Real Estate Tax (IBI). But it also affects other taxes:
  • To the income tax return, as long as it is not a habitual or commercial property, the rest of urban properties are charged 1 .1% of the revised cadastral value for real estate income.
  • Fee on the Increase in the Value of urban Nature land. This tax will be regulated by the municipalities, which are the ones who can apply reductions on cadastral reviews.

So now you know, if you have carried out any rehabilitation in house or you plan to do so before marketing your property do not forget to notify your modification. We hope we have solved your doubts about what the new Cadastre is like for tax purposes and how you can request changes to your cadastral documentation to achieve a completely safe and reliable purchase and sale of your property. And without losing money! For more personalized advice about cadastral discrepancies, contact our team and we will be happy to inform you.