What taxes do you pay when selling a property on the Costa del Sol, Spain

Published on 30 May 2019 at 09:16

If you sell your property on the Costa del Sol in Spain, you will not get the full selling price into your bank account.

You need to take into account some costs that you will have during the selling process/finalisation of the sale.

 

What costs will be deducted from the selling price when selling your property:

1) The commission fee of the real estate agent is being paid by the vendor on the Costa del Sol.  This fee will be automatically retained by the buyers lawyer from the selling price. Contact us for more information about the rates of commission on the Costa del Sol.

 

2) Capital gains tax: when selling your property, it is seen in Spain as a savings income which will be taxed. The scale of being taxed on the savings income will depend if you are a resident or non-resident in Spain. The gain is calculated on the difference between the acquisition value (purchase price +notary costs+ registry costs+ etc) and the transfer value (selling price - plusvalia -etc).

  • Residents in Spain: capital gains tax is scaled ( from 19- 23%) and has some exceptions like reinvestment in habitual residence, sale of habitual residence in people over 65 years old.  If you are a resident in Spain you would have an annual tax declaration and the outcome will depend on your declaration in total (savings income and general income) over the year.
  • Non-residents in Spain: with the sale of the property the buyers lawyers will automatically retain a 3% of the selling price, to avoid that you would disappear and the spanish government would not have any tax income on capital gain from your sale. The scale for non-residents outside EU/EEA is 24%, for residents within EU/EEA  (also Norway and Iceland included) the scale would be 19% on the gain made.  To claim back the 3% retention you would need to fill in a form 210H together with the last 4 years of your income tax declaration of non-resident in Spain and it will take about a year to get the money back if there was a difference beteen the gain and the 3% retention.

 

3) Plusvalia: The plusvalía is a local (municipal) tax charged by the town hall on properties when they are sold. It is calculated on the rateable value of property and the number of years that have passed since the property last changed hands. The objective is to tax the increase in the value of the land on which the property stands, some of which is due to improvements to the area carried out by the local government and the community at large.

The base for this tax is the catastral value of the property which can be checked on your yearly IBI receipt. The amount due in tax will depend on how long the property has been yours: the longer, the higher the amount of tax.  Every townhall has normally a calculator online to calculate the plus valia of the property.  You have 30 days from the date of sale to pay the plusvalia to the town hall.

 

4) Notary costs: will be paid by buyer

 

5) Land Registry costs: will be paid by buyer

 

5) Lawyers fee: Buyer and vendor will have their own lawyer. So each party covers his part. If you sell your property with us, we can offer you special rates. Normally it's 1% of the selling prices but we made special agreements with a lawyers firm we worked with for years and have full confidence in. They work in close collaboration with the notary which is already 5 years number 1 notary in Spain. So both parties are aware of every little change in legislation or windows of opportunity coming up like the new legislation about donations for UK owners that will be affected by brexit. This legislation can save your heirs a lot of money on inheritance tax.

  • For example selling your propert of 200 000 euro: normal laywers fee would be 2420 euro (1% +21% VAT). With our special discount this would be 1210 euro.

 

Above are the standard costs. Below you can find some examples of additional costs that may or may not be applicable to your personal situation:

 

6) cancellation of a mortgage

7) when you have a finca, rural estate , you might have to ask for a AFO license

8) heritance: in case deceased people are on the title deed, this first need to be set straight before the actual sale paperwork can be processed

 


«   »