If you are selling your property in Spain, there are some procedures that you need to complete, as well as some documentation needs to be provided to the future owner before the sale.
The documents you need to provide before completion are:
An updated Nota Simple
The Title deeds (once deposit contract have been signed as most clients do not wish to disclose the price they paid for their property on the first stages of the negociation)
Water and electricity bills, to prove all supplies are up and running.
Council Tax or IBI and garbage collection tax.
Certificate of no-infraction or certificado de no infracción urbanística issued by the Town Hall – Departamento de Urbanismo.
First Occupancy License (Licencia de primera ocupación) or a subsequent Certificado de Asimiliado a fuera de Ordenacion (AFO).
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. This amount can be claimed back and such tax return is included in our services.
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 19% (Eu Residents, Iceland & Norway, the rest of the countries the tax rate is 24%) . 3. Wealth Tax: The tax has been fully ceded to the ACs, which has resulted in many variations. The State’s version of the tax exempts the first 700,000€ of net wealth. The tax applies to residents and non-residents owning assets in Spain. Spanish tax residents receive an extra deduction of up to 300,000€ on the value of their home.
Autonomous Community Variations:
Andalucía – has increased all tax rates, with a top rate of 3.03%.
Madrid – has maintained a 100% exemption to this tax.
Balearics –has increased all tax rates significantly with a top rate of 3.45%.
Cataluña – has reduced the general exemption to 500,000€ and increased tax rates by small amounts, with a top rate of 2.75%.
Murcia – has increased tax rates by small amounts, the top rate is 3.00%.
Valencia has reduced the exemption to 500,000€ and increased all the state tax rates by approximately 25%
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.
Email us or contact our office. +44 (0) 20 3393 4235 / +34 951 08 23 38