Usually our blog posts are directed at buyers because that in the end is who we at Valencia Property are working for to find the best offers and what suits the client exactly. Today though a quick post for sellers and what they can expect to pay on sale.
There are three payments that all sellers should expect and a couple which they may need to make.
1) Notary costs. Most sales in Spain are made with shared costs. This means the buyer pays their part of notary, registry and gestor fees and the seller pays theirs. The cost to a seller is roughly around 0.6% of declared price of the property.
2) Agency Fee. In the majority of Spain the seller pays the agency fees on the sale. In certain areas; Valencia being one of them, those fees are shared.
3) Capital Gains Tax. If you bought for a certain price and sell for a higher price then you are liable to capital gains tax unless you reinvest the money in another property within two years. If you are selling as a non resident then the notary will keep back 3% of the sale price to cover any potential capital gain. Up to this point simple. However if, as a non resident, you are not liable to capital gains tax because there is no profit then you can claim this money back with one caveat.
That caveat, unknown by most sellers, is that you must make sure you have paid your non resident property tax (or wealth tax) each year. This is based on the catastral value of the property. If you are up to date then you can claim straight back, although it takes a few months. If you are not up to date then you have to pay it first and then claim the tax back. (You cannot have it deducted from the amount owed to you!!) A lawyer can organize the payment and claiming of the money back for you. They will charge a fee.
Typically, the property tax on a 100k apartment will be around 200-250 euros per year for non residents although these figures are variable depending on the Catastral value of course. When you purchase, if you are not resident you do not need to make a tax declaration in Spain in theory but it can be useful to set up this tax payment so as to avoid later surprises on selling.
4) You may also need to pay for an Energy Performance Certificate (CEE). If you were given one with your purchase, i.e. in the last three years then it is still valid, validity is 10 years usually. If not then you can get a professional to supply the certificate. Prices vary according to size of property and a few other factors but expect a minimum of around 150 euros and so far we haven’t seen any charge above 450 euros.
5) You will have to pay the “Plusvalía Municipal” which is a tax levied by the local town hall on the notional increase in value of the land the property stands on between when you bought it and when you sell. You have thirty days to pay this after sale. It is currently in dispute in the Supreme Court in Spain so when you read this make sure to consult your lawyer about whether it will be applicable or appealable. In some areas it can be quite a large bill especially if the property has been in your name or family for decades so it is worth checking out firstly how much it might be and secondly whether you can appeal against any ridiculously large charge as the “Notional” increase might not be real.
6) You don’t normally need a lawyer to sell but if you have the issue of recovering taxes, paying plusvalías and issues with your ability to be present at the sale then it can be useful to give a power of attorney to a lawyer to represent you allowing hem to effectively be you at the signing. They can take payment for the property and deposit it in your bank account and do all of the other jobs associated with the house sale for a very reasonable price.
And to all of you buyers out there who normally read our posts, note that it is not as simple as you may have thought to sell a house in Spain so if a snag crops up bear this in mind and give the seller the benefit of the doubt. They are not being wilfully obtuse, it’s just that stuff comes up at times.