Investment approach
Valor de referencia: why the contract price isn't always the ITP base
Since 2022, ITP in Spain has been charged on the higher of the purchase price and the official valor de referencia. Understating the price in the contract does not reduce the tax.
The ITP base on a property purchase in Spain is not necessarily the contract price. Since 2022, following the reform made by Ley 11/2021, the tax has been calculated on the highest of three figures: the price stated in the contract, the value declared by the parties, or the valor de referencia. If that official benchmark is higher than the purchase price, ITP is still charged on the benchmark.
What the valor de referencia is
It is a benchmark value for a property that the Dirección General del Catastro calculates every year from data on actual sales in the area. The same benchmark sets the minimum base for Impuesto sobre Sucesiones y Donaciones, the tax on inheritances and gifts.
Where no valor de referencia has been officially assigned to a property (an unusual property, for example), the base is the highest of the declared value, the purchase price and the market value.
How to find the figure before you buy
The valor de referencia is public: you can look it up in advance, before signing the arras, on the Catastro's online portal using the property's address or cadastral reference. In Catalonia, challenges are decided by the Agència Tributària de Catalunya (ATC); the procedure is explained below.
If the benchmark looks too high
Under article 10 of the ITP law, the valor de referencia can only be challenged in two ways. The first is to pay the tax on the benchmark and then apply to have your return corrected (rectificación de autoliquidación). The second is to appeal an assessment if the tax office issues one (recurso de reposición contra la liquidación). If you simply declare a figure below the benchmark, the ATC will open a procedure and assess the difference plus interest. Either way, the ATC decides on the basis of a mandatory, binding report from the Catastro, which confirms or corrects the value. The burden of proving that the benchmark is too high falls on you as the taxpayer, and without an independent expert valuation you will most likely lose.
For properties with no valor de referencia, the ATC checks values using its own method, published every year in its Instrucción de comprobación de valores.
What this means for a project budget
Working out ITP from the seller's asking price is a mistake. First you need the valor de referencia for the specific cadastral reference, and only then can you build the budget. On DNPI Capital projects we request it at the due diligence stage, before the deposit is paid. What else goes into the budget is covered in our article on the full project budget.
Questions and answers
Can I legally put an understated price in the escritura to reduce ITP?
No. If the valor de referencia is higher, the tax will be calculated on it, whatever price the parties write in. On top of that, understating the price can be treated as tax evasion.
Does the valor de referencia change every year?
Yes. The Catastro revises the values annually using data on actual sales in the area, so last year's benchmark may not match this year's. Check the figure for the year you buy, not an old certificate.