Seller's Guide
STEP 1
GETTING PREPARED
It is important to talk to several estate agents in order to find one that you feel comfortable with and trust. Charges will vary with different estate agents so it is important to be clear on what you will be expected to pay when your property sells. The amounts vary from 3% to 10%.
At James Castile we charge 5%.
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James Castile always recommends that the seller use a qualified solicitor in Spain to represent you throughout the property sale. The seller may have their own lawyer or we can direct them to our company lawyer, but either way the seller must ensure they are qualified and that they can be trusted to act on your behalf.
The seller should have documentation ready. This includes the original title deeds of the property (Escritura), copies of the receipts for the local property taxes (IBI and Basura), copies of water, gas and electricity bills, a stamped certificate from the community administrator to ensure all community fees have been paid and passport and NIE details / or residencia card if the seller has official Spanish residency status.
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The seller will also need an EPC (Energy Performance Certificate) for the property as the sale will be rejected by the notary without one.
STEP 2
SALES PROCESS
Normally, unless an immediate payment of the full purchase price is made, a private contract of purchase is drawn up. This contract would contain the details of both seller and buyer, the legal description of the property and land registry number, purchase price, completion date, possession date and payment dates.
At the time of signing the private contract, a payment on account of the purchase price is always made which is generally 10% of the agreed purchase price (this can vary according to the terms of the sale).
When the purchase is complete and price is paid entirely, the seller will give the public deed of conveyance (Escritura) to the buyer, free of all debt and charges. This deed is issued before a Spanish Notary and is passed from the notary to the tax office to be assessed for Transfer Tax if the property is a resale or second hand property.
If the property is a new build then it will be assessed for Stamp Duty. It is then given to the Land Registry for the new owners details to be inserted.
SALES COSTS
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Those who are selling a property but are not officially resident in Spain will have 3% of the purchase price retained by the buyer. This will be given to the tax authorities on completion of the sale and will be offset against any taxes owed by the seller. This is mainly in respect of Capital Gains Tax. If the total taxes owed are less than 3% you can apply for a refund of the difference. If the tax owed is more than the 3% the seller needs to ensure that the balance is paid within 30 days of the sale.
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Plus Valia is another tax which is due to be paid by the seller but this usually amounts to just a few hundred euros. This is a tax which is levied by the local authorities and will be based on increases in the estimated value of the property.
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Capital Gains Tax is payable on the profit made on the house. The net profit is calculated using the sale price and deducting other fees such as the cost of selling, the original purchase price and an allowance which is calculated each year by the tax office. Profits up to €6000 will be 20% taxed, profits between €6000 and €50,000 22% and over €50,000 will be taxed at 24%
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Agency fees between 3% and 10%
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Legal fees 1%