When selling your property in Spain, many sellers are not fully aware of what they are going to have to fork out in terms of costs before getting the real net figure they want in their hand.
Make sure you take into account the following costs when selling:
1) Plus Valia – every seller has to pay a tax based on the incremental value of the land which the property occupies over the number of years you have owned it.
2) Community Fees: Make sure your Community Fees are up to date – normally you will have to present a Certificado de Communidad to the buyer on signing the Escritura.
3) IBI & Utilities- Ensure your utility bills are up to date as these will need to be paid up to the date of sale. You will have to provide the original proof of payment at the signing. Sellers have to pay the IBI or Council tax for the whole year they are selling.
4) Mortgage Cancellation Fees – Your bank will probably have anywhere from a 0.5% to 1% cancellation charge on the balance of your outstanding mortgage.
5) Mortgage Cancellation & Registration Fees at the Notary – In addition to point 4), as a seller you will have to ensure your mortgage is cancelled at the Notary and Registry. This may cost anywhere from 600 Euros to 1000 Euros and is an amount that will probably be retained by the solicitor to ensure this is done.
6) Non-Resident Retention 3%: If you are non-resident in Spain, the buyer of your property will also have to retain 3% of the Escritura Sales Price to pay directly to the Spanish tax man (Hacienda) on your behalf towards your Capital Gains Tax. Fiscal residents do not have any retentions made on them, but they may have to pay tax on the sale in the following year through their tax returns.
7) Agents Commission – If you have used an Agent to sell your property, then you will also have to account for the Agent’s fees.
8) Fees: A good consulting office should prepare utility contracts, community charge and Suma invoices, liaise with the purchaser’s representatives and the Notary, prepare the Notary appointment and all related paperwork, accompany the seller to the Notary and translate, calculate the 3% retention, calculate and advise re Capital Gains Tax and give fiscal representation throughout the Process.
Obviously you will still have your Capital Gains Tax Liability, but that will depend on your profit. For non-residents, the 3% retention tax counts towards this. Those of you who are making a loss still have to pay out the 3% retention tax, but can reclaim it back from the Spanish tax providing you have all the correct documentation and receipts to prove you have made a loss and paid all your annual taxes.
Once you know what all of these costs may be, you can then work backwards to calculate what price you need to sell at in order to walk away with the amount you have in mind in your hand.
We can help you with all the process related to selling a property in Spain.