Cadastral reference value in inheritances: limits for rectification

The valuation of real estate in Inheritance and Gift Tax (ISD) is a critical point in the settlement of an inheritance. Recently, the Directorate General of Taxes (DGT) has clarified the rules governing the relationship between the value declared by heirs and the Cadastral reference value.

What the DGT has resolved

The inquiry addresses the possibility of rectifying the valuation of an inherited property to adjust it to economic reality. The DGT's criteria determine that the tax base of a property must, as a general rule, be the Cadastral reference value. Only in the event that the value declared by the interested parties is higher than the reference value may such a higher figure be maintained.

If the value declared in the initial tax return is lower than the reference value, there is an obligation to file a supplementary tax return to include the difference. However, the administration establishes a limit: it is not possible to rectify the valuation to declare an amount higher than the reference value if the initial declaration did not exceed said limit.

What this means for you

This criterion directly affects individuals who have received real estate through an inheritance. If, when completing the procedure, a value below the cadastral reference value was declared, the administration will require an adjustment through a supplementary return. The relevant point is that the regulations do not allow using rectification to raise the value of the asset above the reference value if the initial error was declaring a lower value.

What should be done

Upon receiving real estate, it is fundamental to verify that the value assigned in the inheritance tax return complies with current regulations. It is necessary to compare the declared value with the Cadastral reference value before filing the tax return to avoid the need to file supplementary returns. Since each patrimonial situation has its own particularities, it is recommended to assess each case individually to ensure compliance with the applicable regulations.