Selling

There are many different aspects to take into account when Selling a property in Spain.

Whether you are using an agent or attempting to sell privately you will need to have all the relevant information and documentation to hand. We will help you with this and explain how to prepare everything you need.

Also you will need to know about the various expenses and taxes that will need to be taken into account. This will avoid any unpleasant surprises at the end of the process.

A property is sold more easily if potential buyers can obtain all the information they need to make an offer in a simple and direct way. When you want to put your home up for sale you will need at least the following documents:

  • Copy of the Purchase Deed
  • Receipt of the last local taxes paid
  • Copy of the 'Nota Simple' from the Land Registry.
  • Just as in the UK you will also to need an energy performance certificate.

Having these documents available from the start means that there will be no delay in supplying them to the interested buyers.

We offer our clients an option that we believe can be very interesting for every seller. We call it Legal Health Check.

What does it consist of?

Basically we do for the client the same checks that a potential buyer and his lawyer would do before making an offer. From the information provided by the client (copy of the deed and the last receipt of local taxes) we verify the legal status of the property, possible debts, urban incidents, etc. Once the above is done, we extend a documented certificate with the different points of interest for every buyer.
If questions arise that must be solved before or at the same time of the sale, they become clear. In this way the buyer knows from the beginning the existence of the relevant issues that are going to be corrected and how. Our client has the security of knowing that these issues relevant to the sale can be solved. This increases the security and confidence in potential buyers and facilitates the sales process.
Of course the fees for this work are deducted from the fees of the subsequent sale.

Every sale has two sections as explained at the beginning.
Regarding the sale process itself, we request the above documentation from the client, we provide the buyer with everything necessary to make the relevant checks, we contact the administrator if there is a Community of Owners and we review the purchase contract.

But it is the list of expenses and taxes that we believe is of greater importance to our customers at this time. In every sale there are two taxes to take into account.
The Tax on the Increase in Land of Urban Nature (IIVTNU) is a local tax, its amount varies according to each City Council and depending on the value of the land and the number of years you have owned the home.
The other tax is the capital gain, the difference between the price that you paid when you bought your house plus the expenses that you had, and the sale price, less the expenses that you had.

When we prepare a budget of the costs in a sale, we will let you know the net amount you will receive once all the expenses have been calculated.

At the moment of selling there is a fundamental difference from the point of view of the seller's personal situation, whether or not to have the status of fiscal resident in Spain.
Being a resident for these purposes is not only having requested and obtained the corresponding certificate from the police station. Being a resident means having to submit an annual income tax return for individuals (IRPF).
The difference in having or not having this condition supposes that the buyers apply or not a 3% withholding on the price. When a non-resident taxpayer sells a property, the buyer is legally obligated to withhold 3% of the sale price and make the corresponding income to the State Tax Administration Agency (AEAT) within thirty days.
On the other hand, the seller must present the liquidation of the possible patrimonial gain, the 3% withheld will be a payment on account of the total that will have to be paid if we have had a patrimonial gain or it will be returned totally or partially if we have not had profit or if the retained amount is greater than this gain. Another condition for the return of this withholding is having filed the Non-Resident Income Tax (IRNR) for the last four years, if the client has not done so, we will prepare it and present, in almost all cases, the amount for this tax is much lower than the amount withheld, which is why it is interesting to submit it for the AEAT to return the amount withheld.
When we are before a tax resident, this withholding does not occur. Being a taxpayer is Spain it is understood that the seller will present the following year his income tax return and declare the capital gain he would have had. In this case, and if the house sold is the usual one, the tax benefits that exist at the time of selling if the money is reinvested in the acquisition of a new home or if the sellers are over 65 years old will apply.

When our client accepts the offer of a buyer we verify with his lawyer the terms of the contract before it is signed.

It is normal to withhold sufficient funds from the sale proceeds to cover any pending utility bills etc.

Unless it appears that there will be any Capital Gains Tax to be paid there will be a 3% withholding tax which is deducted from the sales proceeds. This is subsequently refunded by the tax office after all the necessary paperwork has been approved and filed. Of course, these items will be included in the list of expenses

You will have the choice as to whether or not to attend the completion of the sale yourself or have us deal with it. Most clients tend to leave us to deal with the completion of the sale and we would obtain the right to do this for you via a Power of Attorney (POA). In fact, even if you would like to be at the Notary office yourself it is advisable to grant us a POA. You can click here for an explanation of a POA.

Apart from representing and signing on behalf of the client at the notary, it is increasingly necessary to use powers to resolve any incident that may arise afterwards. For example, transferring funds, providing documents, dealing with tax office queries, termination of utility contracts and closing bank accounts.

An important issue before formalizing the sale is knowing how our client wants to receive the money. Of course it is not a problem to deposit the price in our client account and transfer to your account, the problem in these cases are the expenses.
There are many companies dedicated to currency exchange and transfer (Money Corp, Currency Direct, HiFX, etc.), if the client does not have an agreement with their own bank, or the commissions are high, it is good idea to contact any of these companies and ask about the conditions to transfer the monies.
We will also ask you for the IBAN of your current account in the United Kingdom in order to make any transfer on your behalf ( balances in your account at the time of cancellation for example) or to facilitate the return of the 3% withholding fee charged to non-residents.

Once the sales deed is formalized, we then check the actual outgoings and pay to you any difference in your favour.
We then prepare and submit the income tax form of non-residents (IRNR). After approval, we request the refund of the 3% withheld or, if applicable, make the payment if there is a capital gain.

From the signing until the end of the entire process usually takes between 4 and 6 weeks, but you should know that this is not a deadline for the return, if applicable, of the amount withheld corresponding to 3%. The usual time in these cases is from 5 to 6 months, currently the State Agency for Tax Administration (AEAT) makes these returns directly to the current account of the client in the United Kingdom.
As this refund is made directly by the tax administration, it is not a problem for us to finalise the costs.
Although the sale is now completed, this is not necessarily the end to our work. We will be available to help you to solve any issues or problems that arise as a result of the sale of your home. Being the keyholder is not unusual when more than one agent manages the sale of the house. We are also called upon to check the inventory of furniture and fittings if being sold with the property.