Expenses when selling a property in Spain
When you sell your house you will need to pay tax to the Hacienda or tax office for any profit you will have made on the sale of your house. The amount you pay and how you pay them will depend on which of the following categories you fall into.
You are required to pay 21% on the profit from the sale of your house (the difference between what you declared when you bought the house and what you will declare when you sell the house).
On the day that you complete on the sale you will be charged a flat rate of 3% on the full amount of the declared sale price (the amount shown in the esctritura or title deed). This amount will be deducted from the final money you will receive when you visit the Notary to complete on the sale of the property. (Buyers from non-resident sellers are required to withhold 3% of the total purchase price and pay it directly to the Spanish Tax Agency, usually through their lawyer or asesoria).
This 3% paid on the day of completion is a part payment of the amount of 21% to be paid on the profit made on the sale. You will be required to pay the remaining amount of the 21% on the profit when asked to by the tax office.
All non-residents are required to pay a 3% retention on the day of completion.
If the vendor believes he is owed a refund (that the tax liability is less than the 3% retention), he has 3 months to present form 212 requesting a refund. This step is done at the local tax office via your legal or fiscal representative.
To qualify and be treated as a Spanish resident requires you to have been living in Spain for 3 or more years and to be able to prove this, by providing the previous 3 years tax returns, an escritura in your name that is more than 3 years old or a certificate from your local town hall to say that you have been registered as living there for more than 3 years. Your lawyer or asesoria will apply for a certificate (O2) from the tax office to say that you qualify to be exempt from the normal retention of 3%.
In this situation you must still pay 21% tax on the profits from the sale. This amount is not paid on completion of the sale, but is declared in your following yearâ€™s tax declaration. If within 2 years of the sale you invest all of the proceeds from the sale into another primary home you will not have to pay this tax. If you do not then you will pay 21% on what is not spent on your next home.
If you are selling a second Spanish home you will be required to pay 21% on the profit. Rollover credit is not available for any other house than your primary residence.
Foreign residents who are aged 65 and over:
If you are selling your primary residence you are not liable to pay capital gains tax. Again you will need to prove that you have lived in Spain for 3 years or more and intend to continue living here. If you intend to go back to your home country you pay 3% tax on the full declared price on completion and then in your next yearâ€™s tax declaration you can claim this money back from the tax office. If you don't declare your taxes here, but can prove that you earn less than 8,000 euros per year, then you are exempt from paying Capital gains tax.
In addition to capital gains tax, the plusvalÃa tax is also paid by the vendor in this area.The plusvalÃa tax is based on the increase in the value of your land from the date you bought it to the date you sell it and it is calculated by your local Town Hall.
Each Town Hall determines the amount of plusvalÃa to be levied on each house sale. The original purchase price and the sale price of the property do not have any effect on the plusvalÃa tax.
The plusvalÃa tax is calculated according to the rateable value of the land and the number of years it has been in the ownership of the vendor. For an indication of the amount of plusvalÃa tax you are likely to have to pay, Real Estate Solutions can help you gain this information with your full IBI Suma invoice.
These fees vary depending on what level of service you require for the sale of your property and if you need fiscal representation for Tax refunds. Charges start from around 600â‚¬ inc IVA (VAT).
Commission paid to Estate agents are also to be deducted from the selling price, my charges currently are 3% for properties over 170,000â‚¬ or 5,000â‚¬ whichever is the greater plus IVA. Please be aware that a networked sale through a number of agents may have extra charges added for the purchaser to pay and you will be informed at the time of any offer being made. Please contact me direct for more information about commission charges with Real Estate Solutions.
Energy Performance Certificate
After 1st June 2013 property owners will be required by law to present an Energy Performance Certificate. When the property is sold, the Notary will need the original EPC before ownership can be transferred. It is the responsibility of the vendor to have a completed Spanish Energy Performance Certificate. After 1st June 2013 it will be against the law for agents to advertise and market properties that have no Energy Performance Certificate in place. The Spanish Energy Performance Certificate can only be issued by certified and registered assessors. These assessors will be architects or engineers.
Real Estate Solutions will arrange for the certificate on your behalf the costs for this service is 191.50â‚¬ inc IVA.
Another one of the essential documents that must be present prior to sale is a valid CÃ©dula de Habitabilidad (also know as the Habitation Certificate).
What is a CÃ©dula de Habitabilidad (Habitation Certificate)?
The CÃ©dula de Habitabilidad is a certificate that is issued by the local town hall once a property has been completed. The certificate is confirmation that the property has been built correctly and in accordance with the planning permission the builder has received from the town hall.
Once the CÃ©dula de Habitabilidad has been issued it is valid for 5 years. After this date has expired it is necessary for the current owner of the property to renew the certificate in their own name.
In order to apply for a new certificate, the owner must provide all the documents required from the local town hall. The documents required can vary depending on the local town halls procedures and each Town Hall charge a different fee. Real Estate Solutions will advise you of the costs should a new certificate be required.