Example
Sell a property in Spain is something that is not extremely complicated but, as a purchase, recommend the intervention of a lawyer appointed to supervise and advise throughout the process. Sellers should be aware of a number of important factors to consider when selling a property.
- Seller Fiscal Responsibility
- Capital gains tax
The seller will be responsible for payment of capital gains tax. This tax is levied on the increased value of the property, namely, the difference between the price of it at the time of purchase and the sale price. Since 1 January 2012 capital gains tax increases pulldown 19% to the 21%. Any additional costs implicit in the sale of housing can be deducted if they are accompanied by the corresponding invoices. Therefore, all taxes inherent in the purchase, legal and notary fees, etc.. may be deducted in the calculation of capital gains tax.
Example:
Precio original purchase: 100.000€
Fees and taxes inherent in the purchase: 10.000€
Sale price: 160.000€
160.000 – (100.000 + 10.000) = € 50,000
50.000€ x 21% = € 10,500 quota differential pay.
Residents declare exempt from this tax are:
- Those over 65 years and have lived in the same property for a minimum of three years.
- If the net proceeds of the sale are reinvested in the purchase of another property within two years.
CAPITAL GAIN TAX:
The seller is responsible for paying Gains Tax but sometimes you can reach an agreement with the buyer. This tax is levied by the local council and is based on the value of the area where the property is located and not the property (this value does not affect the tax Goodwill) between the date of property purchase and the date on which it was sold. The value is set by the City according to the assessed value of land and the number of years it has belonged to the seller.
LIEN:
The seller is responsible for payment of any lien affecting the property, eg mortgages, unless otherwise agreed between buyer and seller.
If the buyer will make the purchase of the property through a mortgage bank, might consider changing the name of the seller to buyer mortgage (always considering the terms and conditions of the existing mortgage) because in this way could be more economical than applying a new mortgage.
IMPORTANT FACTORS TO CONSIDER WHEN SELLING A PROPERTY IN SPAIN:
RETENTION:
If the seller is not resident and has owned a property for less than 10 years old, is important to know that the buyer is required to retain 3% the purchase price and deliver it to the Spanish Treasury. In this way the government ensures that the buyer will pay income tax in the relevant tax arising from the sale of real estate capital. Once the exact amount has been calculated, the seller will receive a refund or additional payment will be required to cover the total tax payment.
If the seller does not retain this amount the buyer should know that it becomes responsible for payment of this tax.
STATEMENT OF THE SALE PRICE:
Not long ago tax evasion was common in Spanish society and real estate transactions a clear example of this. The seller used to declare a price much lower than the actual sales price to reduce the tax on your income to pay income tax on sale of real estate capital. Buyers, they were complicit in these agreements, benefited paying less taxes on the purchase of the property.
In recent 10 years this situation has changed and the Spanish Government lurks especially in regard to real estate transactions. If the appraisers consider declaring property priced very low may impose heavy penalties seller.
For these reasons purposely devalue property value has become a practice of the past and from here we recommend to our customers who do not engage in such activities.
Employees working in Haciendas Garcia Navarro have experience in these matters and know all current legal and fiscal regulations.
From here we are available to help you and offer our services when putting your property for sale through our company. To speak with one of our advisors or have any questions, please do not hesitate to contact us. If you want you can use our service direct call Customer.
Buying Property In Spain
Buying a property in Spain is relatively simple and does not pose major problem, as long as you follow the steps below to discuss. Haciendas Garcia Navarro offers one of the largest portfolios of properties in the Marbella area, and our team of real estate professionals will be happy to guide them through the purchase process. If you do not have an attorney´s assistance is recommended one in order to safeguard their interests in buying. GARCIA NAVARRO HACIENDAS not work with a law firm in particular, but we have worked with many highly competent and happy to recommend any of them, depending on the language of your choice.
The following is a rough guide to the buying process, although it differs from time to time, depending on each operation.
RESERVATION
Once you have decided on the property you want to buy, normal procedure in Spain is to make a reservation deposit. This can be between 3,000 € and 10,000 €, depending on the value of the purchase. This deposit is accompanied by a booking contract which lists the names and documents of both the buyer and the seller, the agreed sale price and any condition is agreed concerning the purchase. The reservation deposit is normally delivered to the realtor or your attorney as a sign of good faith. It is recommended to never pay a booking deposit directly to the landlord.
PROPERTY CHECK
At this point, your lawyer will begin conducting the necessary checks in the office of land registry, to ensure that all documents are in proper order property, there are no liens or debts and that the person who is the current owner sells.
PRIVATE CONTRACT
Once the lawyer is satisfied and that everything is in perfect order is when the buyer and seller sign a private purchase contract. The buyer will pay a 10% deposit (less deposit in the Reserve). In this contract, identities and details of the buyer and seller are set, and the agreed sale price and date for the final transfer of the ownership of the property. At this point, if the buyer decides to withdraw from the purchase and lose your deposit if the seller who removed property from the sale will be forced to pay the buyer double the deposit paid for the same, unless something else is agreed.
Scriptures
In this final stage is when you pay the remaining amount and Scripture is signed before a Notary Public. After the signing of the deeds, Your lawyer will register the property on behalf of the buyer at the local Land Registry.
EXPENDITURES CART
There have been significant changes in taxes on the purchase of a property in Spain from the 1 January 2012. The following summary explains the taxes that a buyer must pay from that date.
When the purchase is made directly to developer: New Homes
The VAT rate has been reduced to 4% for properties purchased in 2012. The new Spanish government has decided to extend during the year 2012 reduced VAT 4% applicable to the purchase of a new home.
When the purchase is made to another owner
Since 1 January 2012 the Transfer Tax (ITP) has risen as specified in the following table:
Purchase Price Tax Rate
0 – 400.000€ 8%
400.000€ – 700.000€ 9%
From € 700,000 10%
Other procedures required for buying a home
People living in Spain only need your ID. (For all those people that appear in the Title Deeds).
To all those people not resident in Spain to appear in the Title Deeds, the Ministry of Interior required to obtain a Certificate of Non-Residence, in the determination of a tax number, the which will also be required later when paying tax. This document is known from NIE. Since 1 January 2012 them local police stations in NIES accept applications by power of attorney; now non-residents must apply for NIE number directly and in person in police stations or Spanish consulate or embassy.
Recommendations
We recommend that you open a bank account at the time you start buying a property, since not only the need for the same, but also for the direct payment of supplies such as electricity and water.
It is also advisable to have a Spanish Will. This will be only related to its assets in Spain and does not concern the assets of their country of residence. This will simplify the process of succession in the unfortunate event of death of the owner and significantly reduces the duration and cost of the process.
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