What Taxes Need to Be Paid When Selling in Spain?

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Posted and filed under Legal Paperwork (NIE, Residencia, Padron), Official Documents in Spain, Property Purchase/Sale Service.

Many people are not aware of what is involved such as taxes to be paid when selling a property in Spain. We hope that you will find this article useful.

Taxes to be Paid When Selling

  1. Capital Gains Tax

2) Plusvalia Tax

Capital Gains Tax

The Capital Gains Tax is a tax calculated on the difference between the price when you acquired the property originally, and the sale price of the house. This is one of the Taxes to be Paid When Selling a property in Spain.

The difference between these two amounts is the profit which has been made. To gain a true figure, you must also deduct any expenses which can be demonstrated (i.e. by receipts). If the expense cannot be demonstrated by justified paperwork, it cannot be deducted from the profit.

Expenses which can be deducted

  • Notary Costs (with receipt of same)
  • Land Registry Costs (with receipt of same)
  • Purchase Tax Certificate (Certificate of 8% & 1,5% taxes, where applicable)
  • Details of Costs of Selling i.e. Agency Invoice of Same

The amount left after a deduction is subject to tax at 19.00% when the sellers are Non-Residents of Spain.

If the Capital Gains amount is more than the 3% Retention, the difference requires to be paid. If the Capital Gains are less than the 3% Retention, the difference should be returned by the Treasury (assuming that all annual tax returns are in order).

Plusvalia Tax

Plusvalia Tax is a tax paid to the Town Hall. Every seller (owner) has to pay a tax based on the incremental value of the land which the property occupies over the amount of years you have owned it. This is not paid annually like SUMA/IBI property taxes but paid when a change of ownership is made.

So if one owner dies on a jointly owned property, then Plusvalia will need to be paid on their share when the Spanish probate is done. But not for the other owner as there is no change of ownership for them. Plusvalia also has to be paid when selling by all owners on their percentage shares and with gifting or donation.

Paperwork required to sell a property

Please make sure that you have in place all paperwork required to sell a property. Please see here below a list of the documents required:

  • Recent invoices of all supplies
  • Community certificate of no debts
  • Copy of Deeds
  • Last SUMA bill paid up to date
  • Habitation Certificate
  • Energy Performance Certificate

Documents

As many people are not aware of the meaning of the last documents I am providing you a description for both of them here below:

Habitation Certficate: this document proves that the property meets the Town Hall habitability requirements. It is not possible for the buyer to take over your water contract without it.

Energy Performance Certificate– this is a new certificate to be provided since June 2013. It is compulsory to have it when you advertise your property for sale or rent.

Other costs you might incurr when selling are:

If there is a mortgage on the property: Mortgage cancellation costs.

If you ever had a mortgage on the property and this has not been removed from the Land Registry yet then it is required that the bank goes to the Notary to sign that they have received full payment for it. Later the document has to be taken to the Land Registry for them to remove the entry from the property.

Both the Notary and the Land Registry will charge you for their services to cancel the mortgage. We usually need a provision of funds to pay them of 800€. If the mortgage has not been paid off yet the process is the same, only that the bank will receive the cheque on completion to redeem the outstanding amount.

This cheque will be deducted from final payment to you.

End of building certificate: Some properties appear to be in construction at the Land Registry office, then this is certificate is required to certify that is fully finished.

Age Certificate or Extension Certificate: these might be required if the current property metres are more than the ones registered.

Registering extra metres is far more complicated than only providing an antiquity certificate but as this will vary with every individual property, we would discuss this personally with you.

Please take into account that we can assist you with any of the matters listed above and any other thing related to the sale of your property.

6 Comments

  • Vivianne Cockman

    I have just sold a property in Pegalajar, jaen. Andalucia. A 3% tax reduction was taken (€900)
    To be refunded, should there be no debts on the house. How long does this take and how do I apply for it.

    • Tracie Miles

      Good morning Vivien, you sent two messages through regarding this. I have replied. Kind regards

  • Vivianne Cockman

    How do I redem the 3% tax, that I recently paid. When I sold a property in Andalucia
    I understand this tax is paid, incase there are any outstanding debts owed on the property. Please advise. Regards.

    • Tracie Miles

      Good morning Vivien, the 3% non-resident tax can be reclaimed after approximately 4 months. You will need to speak to your solicitor who dealt with the sale to reclaim this for you. Alternatively, we can assist you in this regard.

  • John van boxtell.

    Hi my name is John van boxtell. I have a friend who wants to sell a property in alacante. Her husband was the owner of the property but he’s dead now and there’s no will. id like to know how I can purchase the property thanks very much.

    • Amanda Thomas

      Hi John, Your friend needs to do a Spanish probate for her husband first so that the property goes to her name, then she can sell it. If you or her send me an email I can explain what we need for the probate, Kind regards Amanda

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