Perhaps on some occasions you have wondered what the value of your property is. To find out the value of a property is no easy task as it depends on a series of factors. In fact there is the declared value in the deeds, the official or catastral value, the value given by the Tax Authorities, the market value, the value given by a property evaluator etc.

In Spain there exists what we call Evaluation Companies which are businesses of a private nature who assess the value you can give to a property. Professionals (such as architects, engineers, technical architects and technical engineers) work for these companies and between them they are able to assess the value of a property. As previously stated this value will depend on a series of factors: the location of the property, the area, the rental contracts, prices within that area, ground value, cost of construction, loss of value through time, quality of the construction, age of the property, distance from commercial centres, communications, materials used, historical value, good or bad public services nearby (water, electricity, telephone, public transport services nearby etc.)

Generally an Evaluation Company is used when you apply for a mortgage loan to mortgage a property you wish to purchase, to assess the value of family wealth, for inheritance received, for divorce matters, or simply because the owner decides he wants to know how much his property is worth.

The loss of value through time is estimated at 1.5% per year, but this depends on the type of construction and destiny, since with a view to taxes the depreciation of a property depends on the activity to which the asset is dedicated.

From the fiscal point of view there exists a few problems with the evaluation of properties. When a property is for sale the owner that has sold must declare the gain or the loss to the Public Tax Authorities. In order to calculate this it is necessary to look at the official values declared, this is the value written in the purchase and sales deeds, as well as other considerations such as the expenses incurred in the purchase-sale, etc. However at the time of registering the property with the new owner, the Tax Authorities check if the value declared of the purchase-sale is true or false. If they do not believe the declared value, they will send both the vendor and the purchaser a letter with the quantity that they believe is the true quantity, and the difference discovered will be taxed upon which will be what you must pay, plus penalties and interest for the delay. These people have the possiblity to accept the official value and pay what was not declared, or they can appeal that decision which will open up a discussion procedure in order to demonstrate that the truth was declared in the first place in which case you would have to appoint a property evaluator who will certify the value of the property.

We would like to make the most of this opportunity in order to remind the readers that these days property owners must declare their taxes in Spain (WEALTH AND INCOME TAX).