Selling Your Spanish Property
This guide outlines the potential costs for non-resident property owners related to selling their Spanish property in the Andalusian province of Huelva. This document should be used as a guide only as details will vary depending on particular properties, circumstances and location.
If the property carries a mortgage loan on it this will be paid off at the time of completion. The lending bank will provide a certificate detailing the total amount outstanding. The total amount will include capital, interest, admin charge and early redemption penalty etc.
Selling Agents Fee
This fee is agreed between the owner/vendor and the selling agent, normally a percentage of the final selling price.
Legal and Fiscal Fee’s
This fee is agreed between the vendor and their selected legal and fiscal advisor, fees may vary depending on the type and number of services provided. The following fees are include and are often rolled into one overall completion statement.
The vendor is usually responsible for the accountants fees relating to any mortgage cancelation, property registry fee, tax retention & declaration and also the following Notary and Registry costs.
The vendor is usually responsible for the Notary fees relating to the cancelation of any mortgage against the property and also for part of the Notary fee for the transfer of ownership and related paper work.
The vendor is responsible in part for registration of the change in ownership and cancelation of any mortgage at the Land Registry and Property Registry.
Plusvalia is a tax levied by the local Town Hall based on the particular area where the property is located, the surface area of the land and the difference in “Catastral Value” on the date of the previous title deed change and the new title deed change. By law the vendor (seller) is obliged to pay this tax after completion of the sale.
Entidad de Concervacion
The vendor is responsible for paying any “Entidad de Concervacion” fees that may exist if the property is situated in a communal urbanisation or resort. A certificate from the administrator as proof of payment should be given to the Notary at completion of the sale.
The vendor is responsible for paying any Community fees up to the day of completion and must provide a certificate of payment at completion of the sale. Only applicable to properties with communal obligations.
IBI (local Property tax)
The vendor is responsible for paying the annual “local Property Taxes” (council tax) for the property and must provide original receipts of payment at completion of the sale. The billing period is from January to December for the year the bill is sent, annual bills are normally sent out in July. The current owner is responsible for payment of the current year even if the property is sold in January.
There are two local property taxes which are both based on the property's theoretical value according to the local land registry, and is adjusted in line with inflation.
Local property tax (Impuesto Sobre Bienes Inmuebles - IBI)
This is the main local property tax payable yearly to the Town Hall. The amount of the tax is calculated by reference to the valor catastral (official value of the property) registered in respect of all properties in Spain
Mains drainage & refuse collection tax (basura y alcantarillado)
This local tax is payable by property owner and is related to rubbish collection and drainage, in some locations payment is collected in one separate bill at the same time as the IBI. In other municipal areas these two taxes are collected saparatly.
Utilities – Electricity, Water, Gas, Telephone/Internet etc.
The vendor is responsible for paying the utilities bills on the Property up to the day of completion and must provide proof of payment at completion of the sale. It is normal to supply copies of the last invoices from the utility companies together with proof of payment.
Your Legal and Fiscal Advisor or Selling Agent will make the necessary arrangements to transfer the utilities contacts to the new owner.
Non-residents are liable for a "cautionary" retention tax of 3% when they come to sell their Spanish property.
For example, when a non-resident sells their Spanish property the buyer will pay 3% of the sales price (retention tax) directly to the Spanish tax authorities and the vendor will only receive 97% of the sale price.
After the sale, the buyer has one month from the date of sale to pay the 3% retention to the local tax office using the form (modelo) 211. This form (Modelo 211) must be given to the vendor or his fiscal representative so that a refund can be claimed.
Vendors who are making a loss on the sale still have to pay out the 3% retention tax, but can reclaim it back providing they have all the correct documentation and receipts to prove a loss and have their tax affair up to date with the Tax office. The vendor has 3 months to present form (modelo) 212 requesting a refund.
Non-resident property owners in Spain may be liable for income tax, deemed rental income tax, capital gains tax or inheritance tax, etc. etc. Individual situations vary considerably. Non-resident property owners are obliged to submit a non-resident tax declaration form (modelo) 210 (impuestos sobre la renta de no residentes) at the end of each tax year.
CGT (Capital Gains Tax)
This is the difference between the amount that you sell the property for and the amount that you declared having purchased it for previously, as documented in the title deeds.
Deemed rental income tax
If you are non-resident a "deemed rental income" is levied by the Spanish tax authorities for urban real estate not rented out or used as a second residence. Therefore, if your Spanish property is not rented out or not your primary residence (i.e. a holiday home), you will be liable for the "deemed rental income tax" even if you do not let out your Spanish property.
The consequences of non-payment of taxes
Late declaration and/or payment could incur an incremental fine.
Property and bank accounts can be “embargoed” (blocked) until back taxes and fines are settled.