When selling a house in Spain there are different taxes, cost and expense to incorporate in to the transaction. The amount need for taxes and costs will be different from that of buying a property. When buying a house a lot of the costs, such as estate agent fees are usually paid by the vendor. It is important to make sure all payments are made in the correct amount and to the right place.
ABAD lawyers and accountants can assure that all legal requirements are met and that all costs and taxes and paid justly and correctly. As well as claiming back taxes when the retention period is over.
Cost in selling a house.
• Notary costs
• Legal fees
• Community fees and utility bills paid to date
• Mortgage cancelation fees
• Mortgage notary cancelation and registration fees
• Agent commissions
There are various taxes that you will need to pay upon selling your house or business. Some taxes you will have to of paid before completion, other upon completion and the last ones are after completion, not only do you have to pay some but you can also claim back once the transaction is over. When you sell a property, you should be selling the property free of all debt and charges, which means that if you are not up to date on all your corresponding payments then you will need to ensure that they are cleared before completion. In terms of the mortgage it is possible to stop mortgage payments where a purchase agreement exists with the intention of paying off the loan upon completion.
Property sale taxes
The taxes the seller would have to pay when selling a property in Spain are:
The plusvalía is a tax paid depending on the increase of the value of the property. It is the incremental value of the land over the years owned. So the amount taxed is the amount of which the land value has gone up, during the time the present vendor (owner) has had the property. It is a local tax and the longer you have owned the property the higher the tax will be, and it´s based on the cadastral value of the property.
• Capital gains tax liability and tax retention
Capital gains are based on the amount of financial assets the person has in Spain. The buyer is to retain a percentage of the purchase price to cover and clear the vendors post sale taxes, including capital gains. The original idea of this was to prevent sales being made without paying the Spanish tax and simple just walking away, or leaving the country. Once the taxes have been paid and cleared in full you are entitled to the remaining amount, which you can claim back. This can sometimes take a while so it is important to have representation in Spain to follow this up. Please notice that is very frequent that the Tax Man force the seller to pay any non resident tax of passed years with interest and penalties before to five back the tax retention you could be entitled to, therefore is advisable to be updated on the tax obligations in order to avoid finish paying a much higher tax invoice.
“Impuesto de bienes inmuebles” is the council tax that while being the owner you should have paid every year and need to have your payments up to date and cleared in order to sell. You will need to prove this because the property is liable for the payment of this tax in case would be unpaid.