THE CADASTRAL VALUE

When buying or inheriting a home, it is important to understand its cadastral value. It can form the basis for calculating certain taxes associated with the property and its transfer.

Cadastral value is a form of tax value of the property.
It is relevant to some purchase transactions and other transfers, including inheritance and gifts, under the rules applicable to each tax.
It is not necessarily the property's market value.
A professional can identify the correct tax base and calculation for the transaction.
Cadastral value and cadastral income are different. Cadastral income is an assessed figure recorded for the property, rather than the rent actually received. It is determined under the cadastral classification and valuation system.
Cadastral income is used, with the relevant revaluation and multiplier, to calculate a tax value.

It can be relevant to:

  • Registration, mortgage-registration and cadastral taxes.
  • Inheritance tax.
  • Gift tax.

A separate cadastral calculation also determines the IMU taxable base for municipal property tax, where due.


CALCULATING CADASTRAL VALUE

The general method multiplies cadastral income, revalued by 5%, by a statutory coefficient appropriate to the tax and property category.
There are different cadastral categories , reflecting property use, and the applicable multipliers vary.

The article describes building groups A to F and refers separately to land records. Individual subcategories determine the relevant treatment; agricultural land uses a different income basis.
The calculation can also vary where first-home purchase relief applies. First-home relief and principal-residence status are distinct concepts.

WORKED EXAMPLES

  • Consider the following illustration:
    A property bought with first-home relief has cadastral income of €500.
    A 5% revaluation gives €525.
    Multiplying by 110 gives a tax value of €57,750 for the qualifying calculation described.
  • For a shop?
    The article uses category C/1 and a coefficient of 40.80. This is not the IMU multiplier, which must be checked separately.
  • For non-building agricultural land, the example revalues cadastral land income by 25% and applies 90, equivalent to a combined multiplier of 112.5. The correct rules depend on the tax and transaction.

VALUING PROPERTY FOR INHERITANCE

On a death, the inheritance procedure requires an assessment of the estate's assets.
Relevant figures include cadastral income for buildings and cadastral land income for agricultural land.
The appropriate calculation establishes a tax value for each property or parcel of land , supporting the inheritance return.

CADASTRAL VALUE AND MARKET VALUE

These terms are often confused, but they describe different things.
Cadastral value is calculated for tax purposes. Market value is the likely exchange value relevant to negotiation.
An initial market assessment may consider commercial floor area, local price evidence and adjustments for the property's characteristics.
Evidence can include the Revenue Agency's OMI ranges, local transaction knowledge and information from agents and specialist sources.
Adjustments may reflect floor level, orientation, services, condition and other features.
The deed must state the actual agreed price. The original article's suggestion that it must always match an official normal value is too broad: assessment powers and price-value protections depend on the applicable regime and facts.

WHEN CADASTRAL VALUE EXCEEDS MARKET VALUE

Declaring less than the actual agreed price is unlawful. The cadastral tax base must not be confused with the purchase price that must be truthfully stated in the deed.
The price-value system, introduced in 2006, permits qualifying transactions to be taxed using cadastral value while still declaring the actual consideration. It does not authorise an inaccurate sale-price declaration.

It applies only where the relevant conditions are satisfied, including:
The transfer is subject to registration tax rather than VAT.
The buyer is a qualifying private individual, acting outside business or professional activity.
The property and any qualifying ancillary units are residential.
The buyer expressly requests the regime in the deed.

WHEN CADASTRAL VALUE IS BELOW MARKET VALUE

Under a valid price-value election, cadastral taxation can limit value-assessment powers. This protection does not arise merely because a declared price is above cadastral value.
The applicable registration-tax base depends on the statutory regime and a valid election, not simply on the amount chosen for the deed.
Undeclared payments can still lead to substantial penalties and loss of protections.
The multipliers 115.5 for a qualifying first-home calculation and 126 for other residential calculations combine revaluation and the relevant coefficient. They calculate a tax base, not a minimum price that may be substituted for the real consideration.

IS THERE A MINIMUM SALE VALUE?

Can a universal minimum sale price be calculated?
The OMI property market observatory provides geographical price and rental ranges for Italy, helping make the  property market.

more transparent. The original article contrasts this with earlier practices involving understated consideration, but truthful price declarations remain required regardless of the database.
OMI ranges are indicative evidence, not an individual property's definitive valuation.
There is no simple universal formula establishing the minimum market sale price of every property.
The Revenue Agency can examine suspicious transactions using other evidence, including loan amounts. A loan exceeding the declared price may warrant questions, but is not by itself conclusive proof of evasion.
Use qualified professionals to document the actual transaction and apply the correct tax treatment.

CADASTRAL VALUE FOR IMU

For buildings, the general IMU method starts from cadastral income revalued by 5%, then applies the multiplier specified for the category.
Before 2011, the main tax multipliers were more closely aligned.
Law 214/2011 increased the multipliers used for the new IMU framework; later rules and tax changes must be checked for the year concerned.
Transfer-tax multipliers did not follow the same increase.
Different taxes can therefore require different cadastral calculations for the same property.

SOURCE: Inpoi