Spain’s Constitutional Court Questions Property Tax Values: Are We Paying Too Much?

Spain’s Constitutional Court has taken a major step that could shake up how property taxes are calculated. It has admitted for review a legal challenge against the controversial “reference value” (valor de referencia) used as the basis for calculating key taxes like the Property Transfer Tax (ITP) and the Inheritance and Gift Tax (ISyD).

📌 What’s at stake?

Since 2022, this reference value has been imposed by Spain’s Land Registry (Catastro), regardless of the actual purchase price or market conditions. It’s calculated using an automated, opaque system that many legal experts say doesn’t reflect the real value of the property.

According to the High Court of Justice of Andalusia, the system:

• Uses cryptic and non-transparent criteria.

• Relies on small and outdated samples of real estate transactions.

• Ignores critical features like usable space, condition, materials, parking or storage units.

The court stated: “The method systematically ignores the essential characteristics that define a property’s true market value, resulting in absurd scenarios where two very different homes are assigned the same taxable value.”

⚖️ What could the Constitutional Court decide?

If the court finds that the reference value violates Spain’s constitutional principle of economic capacity (Article 31.1), it could declare the system unconstitutional.

This would call into question thousands of property tax bills and potentially entitle taxpayers to refunds—but only if they act in time.

💡 What should you do if you’ve recently bought, inherited, or received a property in Spain?

According to top tax litigation lawyer José María Salcedo, you must act before the final ruling. That’s because Spanish courts often limit tax refunds only to those who have filed a legal claim in advance.

Here’s what he recommends:

• Appeal any tax assessment based on the reference value.

• Request a correction of self-assessments already filed.

• Mention the ongoing constitutional challenge in your appeal to keep your case open.

Even if your case relates only to inheritance or gifts (ISyD), Salcedo advises action, since the same reference value applies to both taxes.

🏠 How to check the reference value of your property

There are three official ways to find it:

1. Online at the Spanish Cadastre website (you’ll need a digital certificate or Cl@ve access).

2. By phone at +34 91 387 45 50 or +34 902 37 36 35 (Spanish-speaking service).

3. In person, by appointment at your local Cadastre office (bring your ID).

📊 Why is the reference value so controversial?

Critics—including the Spanish Association of Tax Advisors (AEDAF)—argue the system:

• Lacks transparency and legal clarity.

• Cannot be verified or contested easily.

• Ignores key features that define a property’s true value.

• May result in taxes being paid on fictional or inflated values.

This controversy is similar to Spain’s municipal capital gains tax (plusvalía), which was declared unconstitutional in 2021 for taxing hypothetical gains instead of actual profits. It has since been reinstated by Royal Decree-Law instead of an Organic Law, which means that if you have paid this tax, I recommend that you file a claim just in case, as it is possible that the law may be repealed in the future.

✅ Final thoughts

The Constitutional Court is now examining whether Spain’s reference value system is fair—or fundamentally flawed.

If you’ve purchased, inherited, or been gifted a property in Spain since 2022, you may have paid more tax than necessary. Acting now could protect your rights and your wallet.