Selling property in Spain – Costs of sales ..
The sale will incur capital gains tax. The tax for non-resident amounts to 19% of profits. A resident has to pay 19% capital gains tax on a profit up to € 6,000. For greater profits, the tax becomes 21%. It is important to save receipts of purchases, renovations, etc. Under Spanish law, the buyer shall pay 3% of the purchase price directly to the tax authorities as a security that the seller declares its sales. The seller may, at the time of sale only charge 97% of the purchase price. The 3% payable by the buyer to the tax office is a payment or credit that the seller has with the Spanish Inland Revenue.
A common misconception is that the seller has fulfilled his obligations when 3% of the purchase price has been paid to the tax authorities. That is not the case. The 3% which the purchaser paid to the tax authorities is only an advance. A capital gains declaration must be drawn up and the seller has then paid 3% of the purchase price as an advance of the total 19% of the profits to be paid.
If this is not paid in full then the buyer is responsible for the seller’s capital gains tax against the Spanish tax authorities. This rule does NOT apply if the seller is a Spanish citizen or a resident with a certificate of tax residence in Spain.
Anyone who sells his property, then the municipality where the property is located, has to pay a fee called Plus Valia. It is a charge that has nothing to do with the capital gain. It is calculated on the period of ownership and assessed on the value plus the index value. The fee is typically a small amount but can be expensive for real estate held for a long length of time.
It’s a big decision to sell your property in Spain and it is therefore important to think it through.
Several estate agents have the same properties for sale. It may mean that the same customer is shown the same residence several times, which can make the customer uncertain. The current system was once a good idea because there were more buyers than sellers.
Most importantly, instead of searching on the internet, where approximately 80% of all real estate sales are to be found, it is also important to look at other channels. Therefore it is important that you consider what help you require.
Should I use a lawyer?
When we start to market your property, we need some documents for the property. The more information we have about the property, the better we can market it.
Before we meet, it is important that you are prepared and have your papers at home and in order. Documents we need is a copy of the title deed (Escritora), and a Nota Simple (Simplified deed) not older than 3 months.
Copy of the last paid Comunidad fee.
You also need the certificate from the municipality showing that IBI, the municipal property tax has been paid.
We follow the directives that are enrolled in Spanish law Decree 218th.
Be sure to prepare your home ready for pictures to be taken.
Photos ares the best opportunity to show your property to perspective buyers. Remember to ensure that the property is clean and tidy. The cleaner the property, the better chance the buyer has to see its possibilities.
Feel free to contact us so that we can arrange a meeting to discuss all the above mentioned issues.