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What is the minimum value to write a property?

Today’s article is going to cover the minimum value to write a property . And it is that many people when buying a property puts a figure lower or higher than the official value since this fact implies a series of obligations with the Treasury and other entities when paying more or less money, depending on the amount that appears in the ownership papers of the house.

Why is writing by the minimum value?

And it is that writing below the sale price is a custom and a mistake that many people make to pay less taxes or try to get an economic return, but it is not recommended as we will detail below.

And is that a problem that many people are unaware of is that what you save by writing for a lower value you lose in the future if you try to sell that property since you pay more tax for that surplus value.

Not to mention that you expose yourself to fines and penalties by the Treasury and to the payment of interest to this entity when it finds out that you pay by putting a lower value than the official one.

And is that the bad recommendation and being well advised on such a sensitive issue makes many people expose themselves to this problem.

In fact, most real estate agencies advise their clients not to do this practice that hurts them, 

Formula to calculate the minimum write value

The final calculation of the value to write a property is achieved by multiplying the cadastral value that appears in the IBI by a multiplying quotient.

This value is calculated between the Variation Coefficient of the Real Estate Market or CVMI and the product of the Market Reference or RM coefficient.

In the end it is such that: CMVC = CVMI / (RM x CAVC)

Formula to calculate the minimum write value

To understand these values ​​we detail them below:

  • CMVC. Coefficient by which the updated cadastral value must be multiplied to obtain the real value of the real estate.
  • CVMI . Variation coefficient of the real estate market.
  • CAVC. Cadastral value update coefficient.
  • RM. Market reference coefficient.

What is the minimum value to write a property?

Another fact to keep in mind is that each municipality calculates these indices. The key is not to write below the minimum value established by multiplying the cadastral value by the multiplier coefficient of the municipality where you have the home.

What is the cadastral value?

In addition, there are other factors such as the cadastral value that affects the price of the deed . The cadastral value is an objective figure that is determined based on a series of estimated calculations for each property based on the data that appears in the cadastre of both the land and the buildings and the building where the home is located.

Risks generated by writing for the minimum value and not for the actual sale value

On the other hand, the deed that is not the property title is a document that indicates the details of the owner of the real estate. In other words, the deed is a piece of paper stating the rights and obligations that a house or apartment acquires or inherits. 

The problem with writing is that you have to set a minimum value to cover it. And it is that the minimum value to write varies according to a series of factors such as criteria established by state agencies such as Communities and Municipalities.

On the other hand, the cost of taxes associated with the sale depends on the Autonomous Community in which it is carried out. But, on average it usually costs between 6 percent and 12 percent of the value of real property. 

In addition to these costs must be added the payment to the notary and the registration costs. For this and other reasons many people try to pay less by indicating a lower amount in the value of the deed .

The problem is that the coefficients to apply to a purchase sale deed depend on the year of the sale , as well as the cadastral value that appears in the Real Estate Tax or IBI.

From all this it follows that it is important not to cheat with these data since there is a risk that the Treasury will come into play by imposing a fine or sanction on the owner of a property that has a different deed value than it should have.

Think these minimum values ​​are to avoid fraud and deception with property sales. If it is given a different value than what the house actually costs, the owner will pay a different amount of taxes.

Hence, the Treasury is interested in the deed value of the houses since this ensures the real value of the properties and that each owner pays what he owes.

In fact, it would not be the first time that someone buys a home, the deed below its stipulated price and after paying all the taxes finds that the Treasury asks them to pay their tax obligations that must reach the price of the deed. as stipulated by the Autonomous Community where said property is located.

Why write for the sale value?

In addition, to this is added the price of interest overdue in their payment . Therefore, it is necessary to consult the tables of coefficients to pay what is determined by the entity that regulates the multiplier coefficient in charge of determining the value of the deed.

A priori all this may seem complicated, but it is not so much, above all, for professionals such as agencies and real estate agents who are dedicated to buying and selling and transact all this type of paperwork on a daily basis with clients.

In case of doubt, the recommendation is to consult an expert and not to put a writing value that is not in accordance with the one that would result from the calculation of the multiplier coefficient.

We hope we have clarified a bit on such a technical and complex issue . In case you liked the article, do not hesitate to share it on social networks or leave us a comment.

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