Selling a property in Spain is something that is not extremely complicated
Seller's fiscal responsibility
The seller is responsible for paying taxes on the capital increase, a tax on income or interest from the sale of real estate. This tax is based on the increased value of the property, having as a reference the original value at the date of purchase and the value of the property on the date on which it was sold. The tax is 18 % for residents in Spain and the same for non-residents.
The expenses of the transfer of ownership (like other taxes arising from the purchase, fees, etc ...) only if they are declared accompanied with official invoices, they can be deducted from the original estimates.
Residents exempt from declaring this tax are:
Those over 65 years, people who have lived in the same property minimum three years.
If the gross profit of the sale are reinvested in the purchase of another property within two years.
The seller is responsible for paying capital gains tax but sometimes you can reach an agreement with the buyer. This tax is levied by the local council and it is based on the value of the area where the property is located and not in the property itself (the value of this does not affect the capital gain tax) between the date of purchase of the property and the date on which it was sold. The value is set by the city council according to the assessed value of the land and the number of years it has belonged to the seller.
The seller is responsible for the payment of any lien affecting the property, such as mortgages, unless there is an agreement between buyer and seller.
If the buyer is going to make the purchase of the property through a mortgage bank, he might consider changing the name of the mortgage from seller to buyer (always considering the terms and conditions of the existing mortgage) because in this way it could be more economic than requesting a new mortgage .
If the seller is not a resident and has owned a property for less than 10 years, it is important to know that the buyer is required to withhold 3 % of the purchase price and deliver it to the Spanish Treasury. In this way the government ensures that the buyer will pay his personal income tax, the relevant tax arising from the sale of the real estate. Once the exact amount has been calculated, the seller will get a refund or an additional payment will be required to cover the total tax payment.
If the seller does not retain this amount from the buyer, he should know that he will be responsible for the payment of this tax.
Here we are available to help you and offer our services when putting your property for sale with our company. If you want to speak with one of our advisors or you have any questions, please feel free to contact us.