The Difference Between Market Appraisal and Cadastral Value

Market appraisal and cadastral value answer different questions. This guide explains what each represents and when each one applies.

The Difference Between Market Appraisal and Cadastral Value

When you evaluate a property, you often encounter two very different numbers attached to it: a market appraisal and a cadastral value. They sound similar but serve distinct purposes, and confusing them can lead to poor decisions in a purchase, a sale or a tax filing.

What a market appraisal measures

A market appraisal estimates what a property would actually sell for under current conditions. It is prepared by a qualified appraiser who studies recent comparable sales, the condition of the building, its location, and the balance of supply and demand at that moment.

Because it reflects real market behavior, the appraisal moves with the cycle. In a strong market it rises, and in a downturn it can fall. It is the number most relevant when negotiating a price or securing financing.

What cadastral value measures

Cadastral value is an administrative figure assigned by the government, usually for tax purposes. It is registered in the cadastre, the official inventory of land and buildings maintained by local authorities.

This value is calculated using standardized tables and formulas rather than live market data. It considers factors such as land area, construction type and zone, but it is updated infrequently and tends to lag well behind real prices.

Why the two numbers differ

In most places the cadastral value sits below the market appraisal, sometimes far below. Governments update cadastral figures slowly, so they trail years behind actual transactions. The gap can be especially wide in fast-appreciating areas.

The two also differ in intent. The appraisal aims to capture true exchange value. The cadastral value aims to provide a stable, equitable base for taxation, which is a different goal.

Who uses each one

Buyers, sellers, banks and investors rely on the market appraisal. It informs offers, mortgage limits and investment analysis because it reflects what money can actually buy.

Tax authorities rely on the cadastral value to calculate property taxes and certain transfer charges. In some jurisdictions a minimum tax base is set by the cadastral figure, which protects revenue from undervalued declarations.

When the distinction matters most

The difference becomes critical in transactions. Relying on a cadastral value to price a sale can leave significant money on the table, since it usually understates worth. Conversely, assuming the market price for tax estimates can overstate your liability.

Due diligence should always include both numbers. The appraisal tells you what the asset is worth today, and the cadastral value tells you the base from which taxes will be charged.

Practical takeaway

Treat the market appraisal as your commercial reference and the cadastral value as your fiscal reference. They are not competing estimates of the same thing. They answer two different questions, and a sound property decision accounts for both.