Property Sale in Spain
lawyers in spain

If you are selling your property in Spain, there are some procedures that you need to full-fill, as well as some documentation needs to be provided to the new owner before the sale.

The documents you need to present before completion are:

  • The Title deeds
  • Water and electricity bills, to prove their supply
  • Council Tax Bill or IBI
  • Certificate of no-infraction or certificado de no infracción
    urbanística issued by the Town Hall – Departamento de Urbanismo, certificate of habitation
  • Licencia de primera ocupación

In some cases the property may lack of one or more of these documents if so, it is strongly advisable to consult a lawyer to deal with this issue.

Taxes involved when selling a property in Spain

The taxes associated with the sale of a property depends on your residency status:

Non- Residents will have to pay the following taxes:

1. Plusvalia (1.5% aprox): this tax is paid to the Townhall based on the increase in land value, calculated since the date of acquisition of the property until the date of transfer to the new owner. The land value is established by the townhall according to the cadastral value of the land and the number of years you have owned the property.

2. Capital Gains Tax:  This tax is paid based on the incremental value of the property over the years you have owned it.  Non residents vendors are retained 3% of the  price stated in the sale deed by the purchaser who will deposit the amount in the Tax Office. This retention serves as an advanced payment on the Capital Gains tax resulting from the property sale.

Capital Gains: The profit will be determined by the difference between the sale and the acquisition value. Any expense related to the purchase of the property can be deducted from this tax, such as purchase tax, notary, land registry and legal fees. The acquisition value will result from adding the real acquisition price plus expenses and purchase related taxes.

The amount resulting from deducting the sale price the acquisition value will be applied the tax rate of 21%.

Example:

Original Purchase Price: 100,000€

Taxes and expenses related to the purchase: 10,000€

Sale Price: 160,000€

160,000€-(100,000€+10,000€)= 50,000€

50,000€x21%= 10,500€ Amount to be Paid

3. Wealth tax: payable each year, the tax is based on the value of your property, with a tax-free allowance of €700,000. The tax rates start at  0.2 – 0.4% from the price of the property .

 

If you have failed in presenting any of these declarations, do not hesitate to consult us to advice you on the implications and how to proceed in such cases.

 

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