How much is my property actually worth?
Text: Anja Sämann-Gutschick y Armin Gutschick
Many home owners in Ibiza would like to know the answer to this question but, unfortunately, it’s not that easy to find it.
The valuation of a property is hugely important when buying or selling it, or for inheritance purposes, because the value shown on the public deed is the basis to calculate sales taxes as well as inheritance taxes.
There are a number of ways to determine the value of a property. One place to start is the sales price declared on the previous notary deed, although it is highly likely that it will not correspond to today’s prices.
Another is the value assessed by the registry, which can be known by checking how much is being paid in property tax. Councils determine the value of each property within their municipality in order to apply this tax (IBI). The assessed value is therefore used to calculate the IBI, the “real value” of inheritances and the Municipal Added Value. Consequently, councils are nowadays adjusting the assessed value to the market value at different rates. It is quite deplorable that, in the Balearics, the system to calculate property value that is used in Catalonia does not exist. In that system, the local Administration has a table of values that are based partly on the assessed value, while the rest is determined by a coefficient that is determined for each location. These tables are used to calculate the taxes on property transfers, the prices that they are bought and sold for and the succession tax, in such a way that taxpayers can obtain from the Council precise information about the value of their properties.
What indications does the Tax Agency of the Balearic Islands give taxpayers so that they can set a price that cannot be disapproved?
On its website, the Tax Agency offers users a method that can serve as an idea to begin calculations. It can be found here:
On this website, you can type in the basic data of the property you wish to value: the assessed value, its age, its location and size. At the end of the process you obtain the valuation of the property.
However, this calculation is not binding before the Tax Agency, and it only offers a way to carry out an approximate estimation of the “real” value of a property. You also have the option of getting a certified appraiser to value your property. These reports are issued based on comparative parameters, and comparisons are made with the prices of properties that are in similar locations and that have similar surfaces and qualities.
Finally, it is worth mentioning that the price that is declared by the taxpayer on a public deed can be revised by the Tax Agency at any time. The Tax Agency can also make its own valuation and therefore always has the last word. In practice, taxpayers are offered two alternatives in order to establish the price of their properties: to calculate the value by using the method offered by the Balearic Tax Agency on its website, or to hire the services of an independent appraiser. •