Selling a property in Spain

SELLING A PROPERTY IN SPAIN

Firstly, it is very important that the owner knows if he is considered as resident or non-resident in Spain.

According to the tax agency (Agencia Tributaria), a person is considered a resident in Spain under one of the following circumstances:

NECESSARY DOCUMENTS TO SELL YOUR PROPERTY IN SPAIN

1. Identification number document

Passport and NIE (foreigner’s identity number).

2. Title deed

Notarial document that was acquired at the purchase of the property. It is the document that states the legal ownership of the property.

3. Land registry certificate (nota simple)

It is an official report that can be obtained at the Land Registry. This document states the property’s situation (ownership, any charges or debts against the property…).

4. Property tax (IBI)

Council tax to be paid for the property. It is usually paid to the town hall once a year.

5. Certificate that confirms that no debts are owned to the Community of Owners

If the property is located in a community of homeowners or development, it is necessary to obtain a certificate issued by the property administrator that proves that there are no community debts.

6. Certificate with any outstanding mortgage amount and registration of cancellation

If the mortgage hasn’t been completely paid yet, the vendor needs to request a certificate to the bank that certifies the exact outstanding balance.

7. Energy performance certificate

It is a report that describes the energy efficiency of the property for sale.

8. First occupation license or habitation certificate

It is a document provided by the town hall when it is first built.

9. Certificate of technical building inspection (ITE)

For older properties, the vendor needs to obtain a document that shows if the building is in good conditions, if it has any deficiencies or pending repairs.

TAXES TO PAY WHEN YOU SELL YOUR PROPERTY IN SPAIN

Even if the owner is non-resident in Spain, it is mandatory for them to inform the Spanish tax authorities about the obtained gains after selling their property.

- Income tax for non-residents (IRNR)

This is a tax to be paid by non-residents for the income obtained upon sale.

To know the exact amount, the difference between the following values has to be calculated:

Acquisition value: this is the total price paid for the property purchase, including costs inherent to the acquisition (tax, notary, Land Registry, etc.). Any improvements and investments made on the property before selling it will also be taken into account.
Transmission value: this is the value of sale of the property minus any derived expenses such as real estate and notary fees, capital gains, etc., which will be deducted.

Once the difference between both values is calculated, a rate of 19% is applied to that amount for residents of EU, Iceland and Norway, and a rate of 24% will be applied for the rest.

Capital gains tax or tax on increase in value of urban land (IIVTNU)

Capital gains tax or IIVTNU is the increase in the value of the property during the time along which the vendor has been the owner. Capital gains tax depends on the increase in the land value, the years that have passed after purchase and the tax rate established by the town hall.

IMPORTANT ADVICE: we highly recommend you sell your property with the help of a trustworthy real estate agency, as well as hire a lawyer, since they will check and process all the paperwork necessary to sell your property in Spain. Furthermore, they will advise you and help you calculate all sale taxes in order to avoid unpleasant surprises.