Cadastral value: what it is and how it is used in decision-making.

The assessed value is the basis used to calculate a property’s property tax. For those who manage a company’s finances, it also helps organize the analysis of a portfolio. A single property has at least three values: assessed value, book value , and market value. Each measures something different and is based on a different decision.

What is the assessed value?

It is the value assigned to a property based on two components: land and structure. Each is calculated using unit values per square meter, defined in tables that are updated annually.

Cadastral value is a regulatory benchmark based on general rules. This makes it useful for calculating property taxes but limited in its ability to measure a property’s contribution to a specific transaction.

3 Values for the Same Property

Why don’t the three match?

Each value is derived from a different source.

• The cadastral value depends on the tables and what is registered.

• The book value depends on historical cost and the assigned useful life.

• The market value depends on usage and the market.
  

A real-world example: Imagine two warehouses of the same size in the same industrial corridor; one operates with high logistics turnover, whilethe other is only partially utilized and has equipment that no longer meets its operational needs. With similar registered floor area and characteristics, the tables yield cadastral values that are very close.

The value can differ significantly because, for cadastral purposes, the value is derived from the tables of unit values for land and construction issued by the authorities, whereas market value prioritizes, among other factors, location, size, supply, and demand.

In projects involving real estate portfolios, there is a discrepancy that almost no one notices in time: the difference between what the table records and what the market recognizes.

Decisions That Depend on Understanding This Properly

• Insurance. The assessed value does not measure the cost of replacing a warehouse. Using it as a reference for an insured amount results in an incomplete assessment.
• Investing. Before expanding, renovating, or divesting, it’s important to know how much of a property’s value comes from its use and how much from its location.
• Planning. Property taxes are based on the assessed value. Understanding this allows you to factor them into your fixed-cost budget with sound judgment.
• Structure a real estate transaction. Whether in a sale, a purchase, or a collateral arrangement, each value answers a different question. Presenting them according to their purpose provides clarity to any financial counterpart.

Mexico City and the State of Mexico

Each jurisdiction has its own framework, and the differences matter when a company owns properties in both.

Mexico City. Property tax is calculated every two months by applying the rate established by the Tax Code to the assessed value. The tables and unit values are updated annually, and the Tax Code underwent reforms effective as of January 2026. Before the tables for the next fiscal year are published, it is advisable to know the registered value of each property and whether it corresponds to its current use.

State of Mexico. This matter is regulated by Title Five of the Financial Code of the State of Mexico and Municipalities, its Regulations, and the Cadastral Manual. The tables of unit values for land and buildings are approved by the Legislature, and each municipality has its own. Two properties with the same characteristics in different municipalities may have different cadastral values.

What to Have on Hand

To accurately assess a property’s value, you should gather the following:

• Location and property ID.
• Current use and intended use.
• Land area and building area.
• Age and physical condition.
• Property documentation.
  

Frequently Asked Questions

Is the assessed value the same as the market value?
No. A property’s assessed value is based on tables. The market value reflects its use and the market.

Why does the assessed value change from one fiscal year to the next?
Because the tables and unit values are updated each fiscal year.

What is the difference between assessed value and book value?
The assessed value is based on tables issued by the authorities; the book value is based on the recorded cost minus depreciation and impairment.

How should property tax be prepared for the next fiscal year?
By reviewing:

1. How much was paid in previous years?

2. Have there been any new constructions, renovations, or acquisitions?

3. Has the property value in the area increased or decreased?