Tax advisors are recommending that property owners request a correction of their property’s reference value from the Spanish Catastro (Land Registry) before taking legal action. According to experts, 70% of valuation disputes are resolved within six months through administrative channels, avoiding lengthy and costly court procedures.
In July, Spain’s Constitutional Court admitted an appeal of unconstitutionality filed by the High Court of Justice of Andalusia (TSJA) concerning the reference value used by the Tax Agency to calculate Transfer Tax (ITP) and Inheritance and Gift Tax (ISD) when buying or inheriting a property. The court’s decision opens the door for taxpayers who disagree with their property valuation to challenge it and potentially benefit from a favorable ruling.
The TSJA argues that this reference value fails to consider the actual physical condition of properties, meaning taxpayers could be taxed on an amount higher than their property’s real market value. This, the court claims, violates the constitutional principle of economic capacity, under which individuals should only be taxed according to their true ability to pay.
According to Rubén Rúa, tax lawyer and partner at Bradia, as well as a member of the Spanish Association of Tax Advisors (Aedaf) expert group on Local Treasuries and the Catastro, a mass wave of legal challenges could do more harm than good.
“Encouraging taxpayers to file lawsuits en masse could lead them into a dead end,” Rúa warns. “In most cases, they could resolve the issue in a matter of weeks by asking the Catastro to review the reference value, instead of engaging in litigation that could take years with no guarantee of success before the Constitutional Court.”
Rúa explains that there are two main ways to request a correction from the Catastro. For taxpayers who have not yet paid the corresponding tax, the Catastro provides a simplified process that allows for adjustments when technical evidence proves the official reference value does not match the property’s true condition.
Those inheriting a property have six months to pay the Inheritance and Gift Tax, while buyers have 30 days to pay the Transfer Tax. Within that period, they can submit documentation to demonstrate that the assessed value is inaccurate.
“At this stage, the Catastro is acting very efficiently — we’ve seen corrections processed within 15 to 20 days,” says Rúa.
If the tax has already been paid, taxpayers still have four years to request a refund of overpaid taxes from the regional tax authority, provided they include a technical property report supporting their claim and, optionally, cite the potential unconstitutionality of the reference value.
“Our experience shows that when taxpayers present sufficient evidence, the Catastro corrects the value because its role is not revenue-driven,” notes the Aedaf expert. He emphasizes the importance of submitting detailed technical documentation — including the property’s size, quality, slope, and condition — since the Catastro cannot act solely on abstract legal arguments.
Rúa clarifies that advisors are not discouraging taxpayers from appealing the reference value’s potential unconstitutionality but rather encouraging them to back up their appeals with solid technical evidence.
“Many people are challenging valuations solely on constitutional grounds when, in fact, they have objective property characteristics that could justify a correction or refund,” he explains.
He adds that the Catastro has been especially cooperative in recent months, actively correcting reference values when the technical evidence is sound.
“If you only allege unconstitutionality, the Catastro can’t do anything,” Rúa warns. “And if the Constitutional Court ultimately upholds the system, taxpayers who didn’t submit a technical report will lose their chance to recover their money.”
