Investment approach
Mortgage valuation (tasación) in Spain: what the bank values and why
A tasación sets the ceiling of the loan and is valid for six months. How the valuer works, who pays, and how a buyer covers the gap when the valuation comes in below the price.
A tasación (the valuation report a bank requires for a mortgage) in Spain determines how much the bank is willing to lend against the flat, not what the flat is worth to you. It is carried out by a company approved by the Banco de España under Orden ECO/805/2003, and the report stops being valid six months after the date of issue (art. 62). The borrower pays. If the valuation is lower than the transaction price, the gap comes out of the buyer's own funds.
What a tasación is and who may carry it out
A tasación is a report on the value of the property pledged as security, which the bank must obtain before the mortgage contract is signed. The Ley 5/2019 reguladora de los contratos de crédito inmobiliario (the Real Estate Credit Contracts Act) requires the valuer to be independent of the bank and of the credit intermediary (art. 13 Ley 5/2019).
The right to value for mortgage purposes comes from approval by the Banco de España and entry in its register. Under Real Decreto 775/1997, the company must employ at least ten specialists, at least three of them with three years or more of valuation experience, and must have liability insurance and internal controls. Urban flats are valued by architects and aparejadores (technical architects). The bank will not accept an estate agent's valuation for this purpose.
How the valuer arrives at the figure
The valuer is required to choose the cautious option. For mortgage purposes the principle of prudencia (prudence) applies: of two equally likely scenarios, the one giving the lower value is taken (art. 3 Orden ECO/805/2003). That is why the bank relies on the valor hipotecario (mortgage lending value) and not on the seller's expectations.
What the rules require the valuer to check:
- Inspection. The technical specialist personally checks the floor area and features against the documents, visible easements and the condition of the property (art. 7).
- Status. Who occupies the flat, whether it falls under a protected-housing regime or heritage protection, whether the property complies with the urban plan (art. 7).
- Comparison. The comparison method requires data on at least six comparable transactions or listings and, for a mortgage, also the local price trend over two years and the exclusion of speculative values (art. 21).
- Documents. If the valuer is not given, for example, the lease of an occupied flat or the land registry data, the value comes out as "condicionado" (conditional) (art. 10), and a figure like that cannot be used for a mortgage (art. 9).
The fewer similar transactions there are in the area, the higher the chance that the valuation will come in below the seller's price.
What the rules say and what it means for the buyer
| Question | What the rules set | What it means for the buyer |
|---|---|---|
| Who values | A company approved by the Banco de España | An estate agent's report does not replace a tasación |
| Who pays | The borrower; the bank pays the gestoría (administrative agency) | The valuation is part of your budget |
| Can you bring your own | The bank accepts a valid report from an approved valuer | If you switch banks you do not have to pay again |
| Validity | Six months from the date of issue | A deal that drags on may need a new valuation |
| Approach | Prudence, at least six comparables | The figure sits closer to past transactions than to listings |
Who pays and whether you can choose the valuer
The borrower pays, and the law says so directly: the costs of the tasación are borne by the prestatario (borrower), and the costs of the gestoría by the bank (art. 14.1.e Ley 5/2019).
The Banco de España lists the other rules in its explainer for customers. The valuer is appointed by agreement between the customer and the bank, although in practice the bank usually chooses. Since December 2007 the bank has been required to accept a tasación that the customer brings, provided it was carried out by an approved company and has not expired; the bank may check it but may not charge for doing so. If the loan is refused, the bank returns the original of the report so it can be used at another bank while it remains valid. The same page advises not ordering a valuation until the bank has at least preliminarily checked your ability to pay.
How much of your own money you need if the valuation comes in below the price
The gap between the price and the valuation is paid from your own funds if the bank calculates the loan on the lower figure. The financing share is set by each bank, and the law does not fix it for a private borrower, so in the example it is an assumption.
Worked example, not a forecast. A flat priced at 600,000 €; the bank, as an assumption, finances 70% of the lower of two figures: the price and the tasación.
| Scenario | Tasación | Loan | Own funds towards the price |
|---|---|---|---|
| Valuation equals the price | 600,000 € | 420,000 € | 180,000 € |
| Valuation 40,000 € lower | 560,000 € | 392,000 € | 208,000 € |
A 40,000 € difference in the valuation turns into 28,000 € of additional own funds. On top come taxes and closing costs: ITP (transfer tax) in Catalonia is 10% on the part of the price up to 600,000 € (ATC), which is another 60,000 € in this example. Your own transaction costs are easy to run through in the calculator.
What to do if the tasación comes in below the price
First find out which figure the bank calculates the loan from, and only then decide the fate of the deal.
- Ask the bank in writing: what share, of what base, and what final amount.
- Check the arras contract (the deposit contract signed before completion): whether it contains a financing condition and what happens to the deposit if the loan falls short. The wording is for an abogado (lawyer) to assess.
- Show the seller the valuer's report: it is an argument in negotiation, but the seller is not obliged to lower the price.
- If there are grounds to doubt the report, order a valuation from another approved company. That costs money and time, and the bank will still apply its own share.
- Allow for timing: the bank issues the FEIN (the standardised pre-contract information sheet) at least ten calendar days before signing (art. 14.1.a Ley 5/2019), and a second valuation shifts the whole schedule.
How banks view non-residents in general is covered in the article on a mortgage for a non-resident, and income from abroad in the piece on what the bank takes into account.
When a tasación is not the right measure of a deal
A tasación does not answer the question "am I overpaying?". Its job is to protect the bank's collateral, which is why it is cautious and relies on past transactions.
- A purchase without a loan. No tasación is needed; the price is checked against closed transactions, see the article on the price gap.
- A non-standard property. A house with no close comparables fits the comparison method badly, and the result may diverge from the market.
- An investment calculation. The decision needs a sale or rental price, not a collateral value. DNPI produces that kind of valuation as part of its property value analysis.
Questions and answers
Who pays for the tasación when buying a flat in Spain?
The borrower, as set out in art. 14 of Ley 5/2019. The bank must warn you about the costs in advance and obtain your consent to charge them.
How long is a tasación valid?
Six months from the date the report is issued, under art. 62 of Orden ECO/805/2003. If the deal drags on, the report expires and a new or updated valuation is needed for the mortgage.
Can one tasación be taken to several banks?
Yes, if it was carried out by a company approved by the Banco de España and the report has not expired. The bank may check the report but has no right to charge for the check.
Why is the bank's valuation lower than the price agreed with the seller?
The valuer must apply the principle of prudence and look at comparables and the two-year price trend. The seller's price reflects expectations; the tasación reflects the value of the collateral.
Should I sign the arras before the tasación?
That is the buyer's decision, but the arras contract should then be agreed with an abogado: what happens to the amount if the bank lends less than expected. Without such a condition, the gap will have to be covered with your own money or the deposit will be lost.
