Run-down property and the reference value: how to challenge it for Spanish Transfer Tax (DGT V1108/2026 and Cantabria 371/2025)

You buy a half-ruined house for €60,000 and the tax office demands tax on €150,000 because that is the Cadastre reference value. The DGT confirmed this in binding consultation V1108/2026, but the Cantabria High Court (Judgment 371/2025) annulled a €23,125.99 assessment on expert evidence. Practical guide: difference from cadastral value, the evidence that wins, deadlines and a Costa Blanca worked example.

Published 29 August 2026 · Bufete Padilla · Tax & property law · Torrevieja, Elche and Moraira

You buy an old, half-ruined house with a collapsed roof and no habitation certificate. You pay €60,000. When you file the Transfer Tax (ITP) return, you discover the Cadastre's reference value for that property is €150,000. The tax office wants tax on €150,000, not on what you actually paid. In the Valencian Community, at the general 9 % rate, that is roughly €8,100 instead of the €5,400 you budgeted.

This happens every week on the Costa Blanca. Spain's Directorate General for Taxes (DGT) has just ruled on it again in binding consultation V1108/2026, dated 18 May 2026, and the courts are starting to set limits. Here is what the administration says, what the judges are already saying, and which evidence actually works.

> 30-second summary. The reference value is the minimum taxable base for ITP even if the property is a ruin and the price is far lower. It is not the same as the cadastral value. But it is not untouchable: you self-assess on the reference value, then file a request to rectify the self-assessment and reclaim the overpaid tax with technical evidence. The High Court of Cantabria (Judgment 371/2025 of 26 November 2025) annulled an ITP assessment of €23,125.99 precisely because the reference value ignored the properties' real state of decay.

1. What the DGT said in consultation V1108/2026

The taxpayer and his wife were buying a home in a total state of disrepair, made up of two separate registry and cadastral plots, for a price below the reference value. They asked which taxable base to declare.

The DGT's answer of 18 May 2026 comes down to four points:

  1. The ITP taxable base is the value of the asset, meaning market value: the most likely sale price between independent parties, free of charges (art. 10 of the Consolidated ITP and AJD Act).
  2. For real estate, that value is the Cadastre's reference value on the accrual date, *unless* the agreed price or declared value is higher. Then the higher figure applies.
  3. Because there are two independent registry and cadastral plots, the taxable base is calculated plot by plot, using each plot's own reference value, regardless of the global purchase price.
  4. The reference value must not be confused with the cadastral value, even though the same body sets both. The cadastral value drives IBI council tax; the reference value drives ITP, AJD and Inheritance and Gift Tax.

And the key point for taxpayers: if the reference value harms your legitimate interests, you may challenge it by requesting rectification of the self-assessment (art. 120.3 of the General Tax Act and the third final provision of the Consolidated Real Estate Cadastre Act).

In short: the DGT does not accept that poor condition or a low price on their own justify self-assessing below the reference value. You pay first, then reclaim with evidence.

2. Reference value vs cadastral value: not the same thing

This is the single most common confusion in notary offices in Torrevieja and Moraira: