Selling A Property
Selling A Property
When we are selling your property in the require the following documentation:
• Copy of title deeds, both mortgage and property. And The originals the day in put up the final new deed and titles in front of a Public Notary.
• Copy of the latest water and electricity receipts.
• First occupation licence from the town hall. ‘cedula de humor images ‘
• Tha last local property tax, IBI, Impuesto de Bienes Inmuebles
• Copy of passport and NOT THE ORIGINAL NOT when we make the final deed in front of a Public Notary.
• Receipt for the last paid community fee ‘ Recibo de comunidad ‘ and a note from the administration that there are no debts ore extraordinary community payments (pagos corriente y libre de derramas) in case there are, these have to be paid.
YOU ARE IN TIITLED TO PAY:
When selling and you have owned the property more than 1 year you must pay Plusvalia to the local authorithy. (Incremento del Valor de los Terrenos de Naturaleza Urbana) This is a tax stipulated by the Local Authority for the increase of the plot and calculated after the amount of years the vendor owned the property. You see the terrain-value on the local property tax receipt/pay-slip (IBI-Impuesto de Bienes Inmuebles) “Valor de Suelo.”
Selling AND WITHOLDING TAXES
A non-resident, who sells his property in Spain is liable to pay the tax on capital gains (CGT). Flat 18% rate, The capital gain is determined by deducting the cost of the original purchase from the cost of the sale.
The cost is calculated by taking the purchase price of the property and adding all directly associated costs (eg: taxes, notary fees, land registry fees, legal fees). An inflationary coefficient is then applied to the resulting amount, the coefficient depending on the year of the purchase and the year of the sale, however, the property must have been acquired at least one year before the sale.
The cost of the sale is calculated by taking the sales price of the property and deducting all directly associated costs (eg: taxes, legal fees, estate agents commission).
The difference between these costs will be the capital gain on which the tax have to be paid, currently 18%. It is important to remember that the purchaser of the property is obliged to retain 3% of the sales price at the moment of the Title Deeds are signed over, this payment to be lodged with the tax Authorities, on account of the vendors CGT liability on a 211 form.
If the 3% retention is lower than the actual CGT liability, then the difference must be paid by the vendor to authorities within 4 months of the sale.
There was a time when anyone who had bought their Spanish property before 31st December 1986 was exempt from paying Capital Gains Tax. THIS NO LONGER APPLIES. And you have to hold back the 3%.
If you have a mortgage it is important to know that you also have to pay the cancellation in the land registry and the notary deed cancellation.
You are intitled to pay the yearly property tax to the town hall (IBI) for the current year as owner to 1th of January.
As a RESIDENT
You pay no taxes if you re-invest the gains in a new main residence home inside the.
If you are resident, over 65 years of age and have owned your property for more than 3 years, there are no capital gain taxes.