Selling your property in Spain

If you have already read our article, BUYING PROPERTY IN SPAIN (https://www.berdaguerabogados.com/buying-property-in-spain/ )

and you have successfully purchased a property this is to give you an idea as to the taxes that you may incur in as nonresident when selling same which should be taken into account when establishing the sale’s price

1) Plusvalia tax

The tax has to be paid to the Local Council of the municipality where your property is located. No plusvalia tax will become due if the owner has suffered a loss. The gain or loss is worked out by comparing the sale’s price and the former purchase price of the land value (construction not included).

If the plusvalia tax becomes due because there is a gain the tax payer can choose between the two following methods of calculation, whichever is the lowest:

1. The calculation is based on the ratable value of the land as shown in the local receipt (construction excluded) at the time of the transfer. On this value certain coefficients are applied depending on the time the property has been in the hands of the owner. On the resulting amount a tax rate is applied which is regulated by the corresponding Council.

2. The calculation compares the sales and purchase price of the land (value of the construction not included). On the resulting difference the tax rate approved by the corresponding Local Council is applied.

In general terms more tax has to be paid if the property is worth mor the gain is higher and a long time has elapsed since the purchase.

2) Capital gains tax:

The capital gains will be the difference between the purchase price plus expenses paid and the net sales price, i.e sale consideration less expenses paid in the sale (plusvalia tax, Real Estate Agent fees if applicable, legal fees etc). On the difference a tax of 19 % has to be paid. If the vendor is nonresident the purchaser has to retain 3 % of the purchase price to be paid directly to the tax office on account of your capital gains tax and after the sale a capital gains tax assessment has to be presented and the balance tax to be paid or if the tax is less than 3 % a refund of the surplus paid can be applied for.

With regards to other expenses normally in a sale’s transaction you may decide to use the services of a Real Estate Agent and a solicitor. The Real Estate Agent is the person you should choose to market the property. He will be in charge of advertising the property and showing it to potential purchasers. The fees normally will be in the region of 4 or 5 % of the purchase price plus 21% VAT.

The lawyer in turn will assist you professionally through the process and will give you the necessary advise and prepare all the documentation required to make a smooth process up to the sale of the property and receipt of sales proceed and make sure that you comply with all legal requirements.

Please note the information provided in this article is of general interest only and is not to be construed or intended as substitute for professional legal advice. This article may be posted freely in websites or other social media so long as the author is duly credited. Plagiarizing, whether in whole or in part, this article without crediting the author may result in criminal prosecution.

Selling your property in Spain

The aim of Rafael Berdaguer Abogados is to assist clients in their needs from a legal and fiscal viewpoint both in Spain and throughout the world.

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