Weightings for the Cadastral Value of Buildings in Spain

Coefficients for the Value of Buildings in Spain

Antiquity and Condition

Seven specific weightings are used in the valuation of the land, but for the valuation of buildings we use only two: 'H' and 'I'. The scope of both coefficients should be defined in the Statement of Values.

Coefficient H: Antiquity

The value of a building should be corrected by applying a coefficient that weights its antiquity and considers the predominant building use and the construction quality. The calculation of this coefficient requires all following parameters:

• t: full years since the finishing of the construction, reconstruction or complete rehabilitation works, until January 1 of the year following the approval of the Statement of Values
• u: predominant building use, which can be Use 1 (residential, offices and landmark buildings), Use 2 (non-manufacturing industrial, commercial, sportive, leisure, hospitality, touristic, health, charity, cultural and religious) or Use 3 (factories and entertainment)
• c: construction quality, which can adopt values between 1 (best quality) and 9 (worst quality).

H can adopt values between 0.17 (buildings in which 't' is 90 years or more, 'u' is Use 3 and 'c' is 7, 8 or 9) and 1 (buildings in which 't' does not exceed 4 years, regardless the value of 'u' and 'c').

Coefficient I: Condition

Coefficient 'I' can adopt the following values, depending on the condition of the building:

• 1.00 if the condition is normal (buildings which, despite their age, do not require major repairs)
• 0.85 if the building has permanent faults, but not compromising normal living conditions or stability
• 0.50 if the condition is deficient (buildings needing repairs of some importance, in which normal living conditions or stability are compomised)
• 0.00 if the building is a ruin (manifestly uninhabitable buildings, or in legally declared state of ruin).

Daniel Trujillano, Architect

http://www.arquitectotrujillano.com/valuation/home.html 

Property Valuation Reports in Spain

Cadastral Valuation of Buildings in Spain

Valuation of Buildings in Spain

Gross Floor Area. Replacement Value and Current Cost. Massive Valuation.

The assignment of a homogeneous economic zone involves the assignment of a Basic Construction Module or MBC ('Módulo Básico de Construcción'). MBC is defined in euros per square meter and it should be implemented by the appropriate coefficient depending on the type of construction. The value of a building is the result of multiplying its Gross Floor Area by the Unit Value and by all applicable weightings.

Calculation of the Gross Floor Area

In order to calculate the value of a building, we define the Gross Floor Area as the area included within the outer perimeter, considering as part of the perimeter, if any, the axes lines of the party walls, and deducing the area occupied by courtyards. Covered outdoor spaces (balconies, terraces, porches and similar spaces) are computed at 50 per cent of its area, unless they are closed in three of its four orientations, in which case they are counted at 100 per cent. If the building use is residential, spaces where the height is less than 1.50 meters do not count at all.

Replacement Value and Current Cost

When we value the buildings we should use the Replacement Value, calculating its Current Cost and taking into account:

• building use
• building quality
• historical and artistic value
• antiquity
• condition
• other circumstances, able to depreciate the value after the real estate market relevance.

Current Cost is defined as the sum of the following concepts:

• the performance cost, including the profit of the builder
• all professional fees
• all taxes affecting the building process.

Massive Valuation of Buildings

All buildings should be classified in order to enable Massive Valuations. However, if the special characteristics of a building permit no identification with any of the established types, or assimilation into any of the typologies, its valuation will have to be singled, by using the valuation method provided by the Statement of Values.

Daniel Trujillano, Architect

http://www.arquitectotrujillano.com/valuation/home.html 

Property Valuation Reports in Spain

Weightings for the Cadastral Valuation of the Land in Spain

Coefficients for the Value of the Land in Spain

Definition and Application

While calculating the value of the land we should apply, where appropriate, the following weightings:

• Coefficient A: for plots with two or more facades, shaping one or more corners (1.10 for two facades, 1.15 if three or more)
• Coefficient B: for plots where the length of the facade is less than the minimum allowed by the urban planning (the higher value between 0.60 and L/LM, where L is the actual length of the facade and LM is the minimum length allowed by the urban planning or, where appropriate, by the Statement of Values)
• Coefficient C: for plots irregular in shape, if this circumstance prevents or hinders obtaining the exploitation assigned by the urban planning (0.85)
• Coefficient D: for plots with excess of depth in relation with the depth which allows to complete the buildable Gross Floor Area allowed by the urban planning or, if applicable, whith the depth which is considered normal in the city, applicable where the assigned building typology is closed block (1/n + 1, where n is the allowed number of storeys)
• Coefficient E: for plots where the area is different than the minimum size allowed by the urban planning or, where appropriate, by the local custom, applicable where the assigned building typology is open building (0.80 if S/SM is less than 1, 0.70 if S/SM is bigger than 2, and 1.00 in all other cases, where S is the area of the plot and SM is the allowed minimum area)
• Coefficient F: for plots where the building activity is not allowed, due to temporary or partial circumstances in relation with the urban planning or with the law, applicable to the affected part of the undeveloped plot while that condition persists, and provided that has not already been considered in the Statement of Values (0.60)
• Coefficient G: for plots assigned for the construction of houses under official protection, or under other public protection arrangements, applicable to undeveloped plots (0.70).

Application of the Coefficients for the Value of the Land

Since the Impact Value already considers most of the circumstances conditioning the value of the real estate product, when we use the Impact Method for the valuation of the land we can only apply Coefficients A and B. However, when we use the Unit Method, all coefficients are applicable, where appropriate as a result of those features of the land that make it specific within the overall real estate market. In any case, the scope of the weightings should be defined in the Statement of Values.

Daniel Trujillano, Architect

http://www.arquitectotrujillano.com/valuation/home.html 

Property Valuation Reports in Spain

Cadastral Valuation of the Land in Spain (III)

Land Values in Spain (III)

Unit Value. Undeveloped, Over-built and Under-built Plots. Massive Valuations.

Whenever we find an Impact Value we should calculate the corresponding Unit Value, in euros per square meter of land, by aggregating the results of multiplying every Impact Value by the corresponding buildable Gross Floor Area. The buildable floor area to consider must be one between the following concepts:

• the buildable Gross Floor Area allowed by the urban planning
• the average value between all buildable GFA applicable to the street, the street section, the zone or the place
• the buildable GFA applicable to the cadastral plot
• in absence of the above values, 1 sq. meter per sq. meter of cadastral plot.

The use of any different value of buildable GFA should be authorized by the Values Statement.

Valuating Undeveloped Plots

Undeveloped plots can be valuated by two different methods:

• Impact Method (VRG), based on buildable square meters
• Unit Method (VUG), based on square meters of land.

Both methods shoud use as many correction factors as applicable.

Valuating Under-built Plots

Under-built plots can be valued by applying the Impact Method, considering either the buildable GFA or the actually built GFA. If we consider the built GFA, the result can be increased by evaluating the remaining building right, according to the procedure established by the Values Statement. Again, both methods shoud use as many correction factors as applicable.

Valuating Over-built Plots

When we value plots where the Gross Floor Area exceeds the buildable value assigned by application of the Values Statement, the Impact Value can be applied to the actual GFA, and then using correction factors.

Massive Valuations

In order to make Massive Valuations possible, each polygon should be associated to a Homogeneous Economic Zone, to an Impact Basic Module (MBR) and to a range of coefficients or, where appropriate, a range of Unit Values.

Daniel Trujillano, Architect

http://www.arquitectotrujillano.com/valuation/home.html 

Property Valuation Reports in Spain

Cadastral Valuation of the Land in Spain (II)

Land Values in Spain (II)

Basic Impact Value

Normally, we value the land -built or unbuilt- at the Impact Value, in euros per square meter of potential or actual floor area. However it can also be valued at the Unit Value -euros per square meter of land- in the following cases:

• when advisable due to the small size of the urban piece of land, the small population or the low activity in the real estate market, whether those circumstances are justified in the Values Statement
• when the land belongs to residential developments in open-building style, with single-family typology
• when the land is associated to communal building uses -sports, health, religious, etc.-
• when the land is associated to territorial general systems
• when the use of the Impact Value is inadvisable due to circumstances referred to in the Values Statement
• when the land is associated to industrial building use and there is uncertainty about the buildable Gross Floor Area, or the buildable floor area is calculated from the size of the plots or the volume of the buildings
• when the land is not built and it's required due to the particular market or urban planning conditions.

In cities where the urban planning is adapted to the the Spanish Law on Land Regime and Urban Planning ('Ley sobre régimen del suelo y ordenación urbana'), the definition of Unit Values should consider the exploitation.

Basic Impact Value of the Land

Basic Impact Value of the land in each Polygon, Street, Street Section, Zone or Place is given by the Residual Method, deducting from the value of the real estate product the sum of the following items:

• the Construction Cost of the existing building
• other production costs
• the profit of the development.

Daniel Trujillano, Architect

http://www.arquitectotrujillano.com/valuation/home.html 

Property Valuation Reports in Spain

Cadastral Valuation of the Land in Spain (I)

Land Values in Spain (I)

Polygon, Street, Street Section, Zone, Place and Plot

Polygon Values ​​are reference values​​. They represent the average circumstances of the polygon or the value of the average Plot defined in terms of urban planning parameters.

Types of Polygon Values

Spanish Royal Decree 1020/1993 considers two types of Polygon Values:

• Basic Impact Value in Polygon, or VRB ('Valor de Repercusión Básico'), corresponding to the most characteristic property product or to the product as defined by the building use and building type defined by applicable urban planning
• Basic Unit Value in Polygon, or VUB ('Valor Unitario Básico'), obtained by considering the buildable Gross Floor Area assigned to the average Plot by the applicable urban planning.

When there is no Impact Value, the Unit Value is set according to urban circumstances and  market status.

Values in Street, Street Section, Zone and Place

The values in Street, Street Section, Zone and Place are used to calculate the individual values applicable to each Plot. R.D. 1020/1993 considers two types of values in Street, Street Section, Zone or Place:

• Impact Value in Street, Street Section, Zone or Place, also called VRC ('Valor de Repercusión en Calle'), obtained in response to the urban characteristics, by correction of the Basic Impact Value in Polygon (VRB)
• Unit Value in Street, Street Section, Zone or Place, also called VUC ('Valor Unitario en Calle'), which is obtained from the detailed Impact Value in Street.

When we calculate the Impact Value in Street, Street Section, Zone or Place (VRC) we must consider the following circumstances:

• location, with respect to different centers of attraction, according to the building uses
• accessibility and public transport means, within the polygon and in relation to the rest of the city
• urban development level and quality of urban services
• real estate market dynamics, in terms of greater or lesser number of operations
• specificity of supply or demand trend.

When we calculate the Unit Value in Street, Street Section, Zone or Place (VUC) we must use the buildable Gross Floor Area defined according to some of the following expressions:

• buildable Gross Floor Area assigned by the urban planning for the Street, Street Section, Zone or Place
• average value between all assigned buildable Gross Floor Areas
• most frequent buildable Gross Floor Area assigned to the most representative buildings of the Street, Street Section, Zone or Place.

When there is no Impact Value, Unit Value in Street, Street Section, Zone or Place (VUC) is calculated by application of the Basic Unit Value in Polygon (VUB).

Plot Values

Plot Values are used to obtain the value of the land in particular pieces. We consider two types of Plot Values:

• Impact Value in Plot, or VRP ('Valor de Repercusión en Parcela'), which is obtained from the Impact Value in Street, Street Section, Zone or Place (VRC), by applying all weighting factors that may apply
• Unit Value in Plot, or VUP ('Valor Unitario en Parcela'), obtained from the Impact Value in Plot (VRP), by applying all weighting factors that may apply.

When there is no Impact Value, Unit Value in Plot (VUP) is obtained from the Unit Value in Street, Street Section, Zone or Place, by applying all weighting factors that may apply.

Daniel Trujillano, Architect

http://www.arquitectotrujillano.com/valuation/home.html 

Property Valuation Reports in Spain

Cadastral Valuation Standards in Spain (II)

Technical Standards for Cadastral Valuation in Spain (II)

Definition of Construction. Land Delimitation. Valuation Polygons.

Spanish Royal Decree 1020/1993 is applied in the valuation of those constructions and buildings which, according to the Spanish Law on Land Regime and Urban Planning, must be subject to a license, with the exception of those that may be considered 'rustic nature constructions'.

Definition of Construction

Spanish R. D. 1020/1993 defines 'construction' as :

• buildings in any case, even if they are transportable and although the land on which they are located does not belong to the owner of the construction
• commercial or industrial facilities that are comparable to the concept of 'buildings' and not to the concept of machines or appliances, such as dams, tanks, loaders, etc.
• development and improvement works and those made for the use of open spaces, like enclosures for markets, outdoor deposits, sport facilities, docks, parking areas and other areas annexed to constructions
• all other buildings that are not expressly described as 'rustic nature constructions'.

Delimitation of Urban Nature Land

In each Spanish municipality there should be a Delimitation of the Land, which must be documented and submitted to the following procedures:

• approval by the Real Estate Territorial Council
• exposure to the public, after publication by edict.

Valuation Polygons

After the Land Delimitation derives the division of the Land in Valuation Polygons, according to the following criteria:

• urban consistency, both for the calification of the land and per the type of constructions
• administrative circumstances
• market characteristics that facilitate the valuation
• economic and social circumstances
• other circumstances, duly justified in the Valuation Settings.

In addition to the listed criteria, in municipalities whose planning is adapted to the consolidated text of the Spanish Law on Land Regime and Urban Planning, the delimitation of polygons must consider:

• distribution areas
• urban land areas referred to further planning
• sectors delimited by general planning on Scheduled Developable Land.

Daniel Trujillano, Architect

http://www.arquitectotrujillano.com/valuation/home.html 

Property Valuation Reports in Spain