Appraisal, market valuation and cadastral value: not the same thing

Three people give you three different figures for the same home, and all three are right. It is not a mistake: they are measuring different things. The bank appraisal, the market valuation and the cadastral value get confused every day, and picking the wrong one can cost you time, money or a problem with the tax office. Here is which one you need for what you want to do.

Bank appraisal (tasación homologada): the bank’s figure

This is the official valuation required by Spanish mortgage rules (Orden ECO/805/2003). It can only be issued by an appraisal company registered with the Bank of Spain, and it serves one specific purpose: to tell the bank how much to lend against the property. It follows a regulated method, is valid for six months, and is usually paid for by whoever applies for the mortgage.

You need it when you are applying for or switching a mortgage. You do not need it to sell — and in fact the appraisal figure need not match what the market is actually willing to pay for your home.

SolProp does not issue homologated appraisals — we are not an appraisal company registered with the Bank of Spain; if you need one, we refer you to an accredited partner.

Market valuation: the one for selling well

This is the estimate of what your home would sell for today, under real market conditions. It relies on the comparable method (what has actually sold in your area, adjusted for floor, orientation, condition, views and community fees), not a generic algorithm that cannot tell a ground-floor interior flat from a penthouse with sea views.

You need it when you are selling and want to set the right asking price: not so high the property goes stale on the portals for months, not so low you give money away. This is what SolProp does offer, with local knowledge of the Costa del Sol.

Cadastral value: the one for taxes

This is an administrative value set by the Catastro to calculate taxes — the IBI, and as a reference for transfer tax (ITP) on resale, for capital gains and for inheritance tax. It is not the market price: it is usually well below it, and it is updated on fiscal, not commercial, criteria.

You look it up when you need to work out a tax. Confusing it with the sale price is a costly error both ways: do not sell at the cadastral value, and do not declare an inheritance on that figure alone without understanding which value the tax office actually asks for.

So which one do I need?

• To sell: a market valuation. It gives you the real asking price.
• To get a mortgage: a homologated appraisal, without exception, by a company registered with the Bank of Spain.
• For an inheritance: market value at the date of death for inheritance tax; in a split or a dispute, an independent valuation avoids arguments between heirs.
• For a divorce: an independent valuation of the shared property, as an objective basis for the split or the buy-out.

The most common mistake

Setting the asking price from the cadastral value (you fall short) or from an old mortgage appraisal (which answers a different question). All three figures are legitimate, but each answers something different. Before making a decision about your home, make sure you are looking at the right number.

If you are thinking of selling on the Costa del Sol and want to know what your home would truly sell for, request a market valuation and decide with the right figure in hand.