# Selling a property in Spain



## Michael Kelly (May 30, 2017)

Has anyone any experience of selling a property in Spain? I am interested in knowing what taxes and charges need to be paid and if they need to be paid immediately or later?


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## Lynn R (Feb 21, 2014)

Michael Kelly said:


> Has anyone any experience of selling a property in Spain? I am interested in knowing what taxes and charges need to be paid and if they need to be paid immediately or later?


I sold my house in 2017. Estate agent's commission - 5% of sale price, was deducted from the sale proceeds and paid to them by the buyer's lawyer. Plus valia payable to the Ayuntamiento - depends on how long you have owned the property and the catastral value, should be paid within 30 days of completion. My Ayuntamiento has an online calculator which I could consult to find out in advance how much that woud be. Capital gains tax if you sell at a profit - if you are selling as a Spanish tax resident, obtain a certificate of fiscal residence from the AEAT and submit it to the notary, to avoid having 3% of the sale price retained against potential CGT liability. Then the sale needs to be accounted for in your next Spanish income tax return and any CGT paid. You can offset against CGT the transfer tax paid when you bought the property, plus legal and notary fees (if you have the invoices), the plus valia and the estate agent fees, plus possibly costs of extending or altering the property (if you obtained all the necessary permissions) but not things like new kitchen or bathrooms or routine maintenance. If the property has been your principal residence for at least 3 years and you buy another property (either in Spain or another EU member country) and invest all the sale proceeds within two years there is no CGT to pay, nor if you are over 65 when you sell and the property has been your main residence for 3 years or more. The seller is liable to pay the IBI for the year of sale but in many cases (including mine) the seller and buyer agree to split the bill proportionately.


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## Michael Kelly (May 30, 2017)

Lynn R said:


> I sold my house in 2017. Estate agent's commission - 5% of sale price, was deducted from the sale proceeds and paid to them by the buyer's lawyer. Plus valia payable to the Ayuntamiento - depends on how long you have owned the property and the catastral value, should be paid within 30 days of completion. My Ayuntamiento has an online calculator which I could consult to find out in advance how much that woud be. Capital gains tax if you sell at a profit - if you are selling as a Spanish tax resident, obtain a certificate of fiscal residence from the AEAT and submit it to the notary, to avoid having 3% of the sale price retained against potential CGT liability. Then the sale needs to be accounted for in your next Spanish income tax return and any CGT paid. You can offset against CGT the transfer tax paid when you bought the property, plus legal and notary fees (if you have the invoices), the plus valia and the estate agent fees, plus possibly costs of extending or altering the property (if you obtained all the necessary permissions) but not things like new kitchen or bathrooms or routine maintenance. If the property has been your principal residence for at least 3 years and you buy another property (either in Spain or another EU member country) and invest all the sale proceeds within two years there is no CGT to pay, nor if you are over 65 when you sell and the property has been your main residence for 3 years or more. The seller is liable to pay the IBI for the year of sale but in many cases (including mine) the seller and buyer agree to split the bill proportionately.


Thanks for all this great info. Is there anything to watch out for if selling as a non-resident?


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## Lynn R (Feb 21, 2014)

Michael Kelly said:


> Thanks for all this great info. Is there anything to watch out for if selling as a non-resident?


If selling as a non-resident, you will definitely have 3% of the sale price retained by the buyer or their lawyer against your potential CGT liability, which they have to pay to AEAT (and probably they will retain the plus valia amount too). If you have sold at a loss you would then have to reclaim those amounts from Agencia Tributaria and the Ayuntamiento, which can be a very long drawn out process, although if the Agencia Tributaria have not made the refund within six months they are obliged to pay you interest (don't know how much). If you use a gestor to make the claims for you, obviously you'll have to pay their fees too

I forgot to say, there is IVA at 21% to pay on the estate agent's commission.


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## Nomoss (Nov 25, 2016)

Michael Kelly said:


> Thanks for all this great info. Is there anything to watch out for if selling as a non-resident?


If you do not make a profit on the sale after deducting allowances, buying and selling costs, and commissions, you will be due a refund from the 3% deduction from the sale price for non-residents.

In order to get this back, make sure you have a gestor in Spain with the appropriate mandates to make the necessary claims, and respond to official correspondence.

Things may have changed, but we had a lot of problems because we had no representative there, and Hacienda would not post official correspondence outside Spain; it took over two years from the sale of our last property to get a refund, as we were no longer residents.

I queried the necessity for a representative in Spain with both Europe Direct and SOLVIT, as I had understood that the requirement for a legal representative had been removed some years earlier.

I was told that although there was no requirement for a LEGAL representative, that Spain expected people who had left to have an address in Spain, which could be simply a friend or acquaintance.

However, some of our correspondence had to be collected and signed for in a Hacienda office, which could only be done by ourselves or a legal representative with a mandate.

EDIT: Travel and gestor's costs took a significant chunk out of our refund, so try to get a gestor to give a fixed fee for the service.
We only used a gestor once. Hacienda would send letters to France telling us we had a document to be collected in Spain. The first time, we asked a gestor in Madrid to collect it for us, for which they charged about €100. It turned out to be a letter informing us they had received my claim.

EDIT 2: Fortunately we live only a couple of hours' drive from Figueres, so going to the Hacienda offices there was not such a big deal, but for anyone without this possibility reclaiming the retention might be a real hassle.


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## Michael Kelly (May 30, 2017)

Thanks for all this great info. What about if you are selling as a Spanish resident but have not yet agreed the purchase of a new property - can you give the rental address of where you are currently living in Spain?


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## Nomoss (Nov 25, 2016)

Michael Kelly said:


> Thanks for all this great info. What about if you are selling as a Spanish resident but have not yet agreed the purchase of a new property - can you give the rental address of where you are currently living in Spain?


If you are selling as a Spanish resident, you will still be liable for CGT unless you have owned and lived in the house for, I believe, 5 years, maybe at a different, lower rate.

But check the current regulations on the above, they changed frequently when we were there. This made calculating CGT liability complicated, as different laws applied during the various periods of ownership, and it was calculated down to the exact number of days when the appropriate law applied.

It doesn't matter what address you give, so long as you are sure you will receive mail posted there in the future (say for 2 years, to be safe). I wouldn't rely on a change of address being registered with every department which will eventually have the original one during that time


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## Lynn R (Feb 21, 2014)

Michael Kelly said:


> Thanks for all this great info. What about if you are selling as a Spanish resident but have not yet agreed the purchase of a new property - can you give the rental address of where you are currently living in Spain?


When I sold, with a certificate of fiscal residence, I had not yet agreed the purchase of a new property and was moving to a house lent to us by friends. I did not have the 3% retained against CGT. In Andalucia, where I live, the property needs to have been your main residence for 3 years not 5, although this may vary between different autonomous regions so you need to check that.

If you apply for a certificate of fiscal residence, allow plenty of time before completion day. My sale went through pretty fast (3 weeks from accepting the offer to completion) and I asked for the certificate within a couple of days and it was only just received in time. 

If you sold now you would not have to report the sale on your income tax return until June 2020 anyway as the return this year relates to last year's income.


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## Lynn R (Feb 21, 2014)

As I thought, it is 3 years you need to have owned the property as your principal residence to qualify for CGT exemption if you reinvest all the proceeds in another property within 2 years, not 5.

Capital gains tax in Spain | Ábaco Advisers


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## Rabbitcat (Aug 31, 2014)

Lynn R said:


> If selling as a non-resident, you will definitely have 3% of the sale price retained by the buyer or their lawyer against your potential CGT liability, which they have to pay to AEAT (and probably they will retain the plus valia amount too). If you have sold at a loss you would then have to reclaim those amounts from Agencia Tributaria and the Ayuntamiento, which can be a very long drawn out process, although if the Agencia Tributaria have not made the refund within six months they are obliged to pay you interest (don't know how much). If you use a gestor to make the claims for you, obviously you'll have to pay their fees too
> 
> I forgot to say, there is IVA at 21% to pay on the estate agent's commission.


If you are selling as non resident and have been paying your non resident property tax for 3 years- does that not suffice to negate the 3-% retention fee?
Cheers


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## Nomoss (Nov 25, 2016)

Rabbitcat said:


> If you are selling as non resident and have been paying your non resident property tax for 3 years- does that not suffice to negate the 3-% retention fee?
> Cheers


Unfortunately the answer is NO.

I think that the length of time the property was a main residence necessary to avoid CGT, may have been 5 years when we sold our Spanish apartment in April 2010, but no longer have any record of this.

We bought the apartment with part of the proceeds from our house, and were shocked to find we had overlooked this, but as prices had fallen drastically by then, and we made no capital gain on the sale, it made no difference.

We bought the apartment in April 2005, and it was our main residence in Spain until May 2006, when we officially became non-residents.

We paid all the property taxes, plus Wealth Tax on its value, until 2007 when this ended for non residents, and Income Tax on the imputed rent until we sold it.

None of the above made any difference to our liabilty to CGT on the sale.


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## Rabbitcat (Aug 31, 2014)

Yeah wasn't talking about avoiding CGT just the 3% retention 

Anyway think I have found answer which is retention still applies and proof of payment of non resident tax required for claiming it back


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## Nomoss (Nov 25, 2016)

Rabbitcat said:


> Yeah wasn't talking about avoiding CGT just the 3% retention
> 
> Anyway think I have found answer which is retention still applies and proof of payment of non resident tax required for claiming it back



Sorry I didn't make it clear, but the retencion is made for sales by non residents because they are liable to CGT.

As stated above by Lynn R, following the sale, a non-resident tax return has to be made in order to reclaim all or part of the retencion.


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## Lynn R (Feb 21, 2014)

Rabbitcat said:


> If you are selling as non resident and have been paying your non resident property tax for 3 years- does that not suffice to negate the 3-% retention fee?
> Cheers


No, if you sell as a non resident it doesn't matter how long you have owned the property for, be it 3 years or 30, the 3% will still be retained. As stated in the Abaco Advisers article I linked to, they do this to avoid the likelihood that non residents will just leave the country without paying the CGT (nothing personal, no doubt they learned by experience.

A resident who sells but does not supply a certificate of fiscal residence will also have the 3% retained.


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## Rabbitcat (Aug 31, 2014)

What is a certificate of fiscal residence


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## Lynn R (Feb 21, 2014)

Nomoss said:


> Sorry I didn't make it clear, but the retencion is made for sales by non residents because they are liable to CGT.
> 
> As stated above by Lynn R, following the sale, a non-resident tax return has to be made in order to reclaim all or part of the retencion.


I didn't actually say that - I was talking about a resident who has not had the 3% retained having to account for any capital gain, or provide evidence of why they are exempt from it (having reinvested the proceeds in another property, or being over 65 and had the property as their main residence for at least 3 years) on their subsequent tax return.

This is an extract from the Abaco Advisers article I linked to above - it's actually a form 210H which has to be submitted by a non resident to reclaim the 3% if no CGT is due, not the normal non resident tax return (although the refund won't be made if the non resident tax returns aren't up to date). What they say about refunds taking around a year is true - a friend sold her house in April last year and is still waiting for the refund of the 3% retention.

"If more CGT is needed than is covered by the 3% then you will need to provide the extra, if not you will receive a refund. In order to collect any refund you need to complete a form 210H. This should be submitted within three months of the sale along with the last four years of non-resident income tax. From the date that it is presented you should allow around a year to receive the refund."


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## Rabbitcat (Aug 31, 2014)

I asked yesterday what is a certificate of fiscal residence 

If I do not receive a full and response by midnight I will consider myself at war with this forum

God save the king


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## Lynn R (Feb 21, 2014)

Rabbitcat said:


> I asked yesterday what is a certificate of fiscal residence
> 
> If I do not receive a full and response by midnight I will consider myself at war with this forum
> 
> God save the king


I surrender.

The certificate of fiscal residence is pretty self-explanatory, really. It is a certificate supplied by Hacienda to confirm that you are tax resident in Spain and have made income tax returns here. If you have a digital signature or a [email protected] PIN I believe you can get one online through the AEAT website, otherwise you would need to request one from your local Hacienda office which is what I did. I was given a very simple form to complete, they scanned it into their Registro system and gave me a printed receipt. I was told it would be posted to my home and if it had not arrived after two weeks I should go back and ask about it (they checked with me what date the completion at the notary's office was due). It hadn't arrived after that period (and by this time completion was only two days away) so I did go back and they checked and printed one off for me in the office. The original did arrive through the post a few days later but would have been too late for the notary.

There is also the Certificado de Residencia Fiscal (Convenio) which is a separate one you have to obtain to get double taxation relief.


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## Rabbitcat (Aug 31, 2014)

Thank you Lynn

You are very helpful as always

War averted


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## LisaP69 (Jun 16, 2021)

Hiya. New to all this. Sadly my lovely dad passed away last month and bless him left me and my brother a town house in Zurgena. Its valued at approximately £65-85K. We are going through the painful process of Spanish probate through a company based in the UK E&G solicitors in Spain. The probate fee with this company is quoted at 4K plus vat plus disbursements and a further £2250+vat and disbursements. We are worried that one is this company a safe bet, will it be a straightforward case. And how easy is it to sell in Spain at the moment? We can’t even get down to check in at dads house because of the covid restrictions and would really appreciate some advise! 🙏🏼🙏🏼🙏🏼🙏🏼🙏🏼🙏🏼 🙏🏼


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## tardigrade (May 23, 2021)

Sounds a lot of money... Would have been cheaper I guess with a Spanish based company.. I think you are probably paying for a member of the staff to have a holiday in Spain...

There are not many restrictions on entering Spain today so sadly, that is not an excuse.


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## LisaP69 (Jun 16, 2021)

Would it be fairly straightforward coming to Spain and going through an English speaking Spanish solicitor? Many thanks


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## Melosine (Apr 28, 2013)

LisaP69 said:


> Would it be fairly straightforward coming to Spain and going through an English speaking Spanish solicitor? Many thanks


Not sure if this is allowed but this is a special circumstance. 
www.arboleas.co.uk is the local forum. La Zurgena is a couple of miles away and there are many residents on the forum. Am sure someone there can help you. They might even have know your late father. I know the area well but do not live there now otherwise I would offer to help.
Good luck.


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## LisaP69 (Jun 16, 2021)

Melosine said:


> Not sure if this is allowed but this is a special circumstance.
> www.arboleas.co.uk is the local forum. La Zurgena is a couple of miles away and there are many residents on the forum. Am sure someone there can help you. They might even have know your late father. I know the area well but do not live there now otherwise I would offer to help.
> Good luck.


You are a star
Thanks


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## Lynn R (Feb 21, 2014)

LisaP69 said:


> Would it be fairly straightforward coming to Spain and going through an English speaking Spanish solicitor? Many thanks


It can be fairly straightforward - but be prepared for it to take a pretty long time. If you can get a recommendation from people based locally for a trustworthy lawyer, you can give them power of attorney to deal with the inheritance aspects and the sale of the property for you. All the people who have inherited a share of the property will need to obtain NIE numbers (if they don't already have them) and open non-resident accounts with a Spanish bank to receive their share of the proceeds. If the inheritance and subsequent sale takes a long time, that can rack up quite a lot in non resident bank charges plus standing charges for utilities and the IBI (Council Tax) for the house will need to be paid. An escritura de herencia (deed of inheritance) has to be drawn up and signed off by a notary before the house can be transferred to the new owners' names to enable it to be sold. Sometimes agents will market the property before that has happened, but the sale could not be completed without it.


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