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Homeowners live in houses 20% more expensive than those they rent out

The cadastral value of rented properties is up to 25,000 euros lower, according to the Treasury.

The cadastral value is the figure that serves as the taxable base for taxes such as IBI, the main source of funding for local councils. Unlike the market value, which arises from a process of free negotiation, the cadastral value is determined according to a method that is considered objective. In theory, the cadastral value can never exceed 50% of the market value, something the State Treasury tries to achieve by updating the coefficient to correct for the periodic ups and downs of the free market, which is more volatile than cadastral activity. 

The official statistics of the Personal Income Tax (IRPF) show a change in the behavior of the housing market in Spain: owners of rented properties live in much more expensive premises than those who rent. In particular, the Treasury data show that the cadastral value of owner-occupied dwellings is 20.4% higher than that of tenants. This is a general trend throughout the country. 

This trend is evident in all regions of Spain, with the exception of Cadiz, where the value of rented dwellings is 1% higher. In contrast, the biggest difference is seen in provinces such as Pontevedra, where the figure is 37% higher, or Lleida, Girona and Tarragona, where it also exceeds 30%. In large rental markets such as Madrid, Barcelona, Valencia, Malaga and Seville, the difference ranges between 16% and 26%. In absolute figures, for example in Madrid, this difference exceeds 25,000 euros. 

It should be remembered that the Tax Agency's figures are based on the cadastral value of the property declared by the taxpayer and not on the market value, so there are no official figures. However, they can give an idea of the difference between some properties and others. As Rocío García Ramírez, technical director of property taxes at Euro-Funding, explains, the cadastral value is the monetary estimate that the Administration assigns to each property in order to determine its fiscal repercussion, and is therefore based on various valuation factors and allows the evaluation of the property and its services.

García Ramírez goes on to say that it is based on several factors of a very different nature, which leaves little margin for error. For example, the cadastral agent will analyze whether the property is located on a corner with access to two streets, whether the house is square or rectangular, whether it has exterior finishes, whether it is on the first street, whether it has a lift, parking, terrace or rooftop, etc. All these details together with the size of each floor, the height, the state or degree of conservation of the property, etc. make the cadastral value even higher. 

All the details add up to the value of the land, which is another important indicator that makes up the cadastral certificate, adds David Paramio, director of Tinsa Advisory. "The value of the land is determined on the basis of a valuation drawn up by each local council, and each area or zone is assigned a value based on factors such as proximity to the city center or to certain services". 

For these reasons, the experts add, the IRPF data reflect, in general, that rental housing tends to be cheaper, of lower quality and located in areas with a lower market value. On average, the cadastral value of rented housing is 57,113 euros, lower than the 68,772 euros of the owner's main residence. 

The IRPF return also includes data on unoccupied dwellings, which include properties that are not habitually occupied by their owners but which are not the object of an economic activity such as renting. In other words, these are second homes. 

The cadastral value of these types of dwellings is much lower than that of regular and rented dwellings, which according to the experts interviewed is due to the fact that they tend to be located in cheaper market areas.