BUYERS/SELLERS FAQs

 

What are the BUYING COSTS?  

‘The simplest way is to add an additional 10% of the sales price to cover these costs.’
 
‘There is no difference in costs for Residents or Non-Residents. The general costs for buying are:
 

• ITP Transfer Tax/ Impuestos sobre Transmisiones Patrimonales : 6.5%
• Notary: approximately 1000€ 
• (Also if the property is owned by a company and it is the very first transmission, the purchaser is expected to pay 7% IGIC and 1,5% as Stamp Duty instead of 6,5%)

The costs for the notary and Registro depend on the value declared. This is a percentage given by law (Aranceles). It is best here to talk to the Notary and Land Registry to get a quote.
 

• Registering the property/Registro de propiedad: approximately 300-600€’
• Legal Costs (Optional but highly recommended): approximately 1,200-2,500€ variable 

 

What are the SELLING COSTS?

• ‘Estate agent commission fee (expecting that all the property papers are up to date, if not will usually be reflected in legal fees) approximately 3-6%.
• Capital Gains tax, the seller might have to pay capital gains tax. This could be as a resident or as a non-resident.
• Plusvalia
• Legal Costs, optional (recommended but not obligatory) costs variable’

 

What is CAPITAL GAINS TAX?

‘Capital gains tax (CGT) is payable when you sell an asset that has increased in value since you bought it. The rate varies based on a number of factors, such as your income and size of gain. For residential property it may be 18% or 28% of the gain (not the total sale price)
….. Any capital gain from the sale or transfer of assets located in Spain has a fixed tax of 24% for Non-Residents, being 19%, if it is resident in any other country of the European Union, Iceland or Norway.’ (https://gmtaxconsultancy.com/en/residents-irpf-pit/capital-gains-tax-on-selling-property-and-shares-in-spain)' you will be considered a tax resident in Spain if you stay in the country for more than 183 days per year (6 months). 
In that sense, if you are considered a resident, the capital gains tax to be paid will be: 
 

• 19% for the first 6.000€ obtained as a profit
• From 6.000€ to 50.000€, the tax percentage is 21%
• From 50.000€ - 200,000€ is 23% and onwards, 26%

Remember that this percentage will be applied to the difference between the price you paid to purchase the property (or any other asset) and the one you receive when you sell it.' (https://balcellsgroup.com/capital-gains-tax/)
 
 
*Consult an accountant or legal adviser for guidance refer to: Recommended Professionals*
 

What is Plusvalia?

‘Plusvalia is the tax on the increase of the value of the land the house is built on, the seller must pay this. If the sales price is less than the original purchase price, then there should not be any Plusvalia at all.
 
The easiest is to ask the local Town Hall/Ayuntamiento for an estimate. They are normally quite helpful. They have all the information they need in their system, also found in the seller’s old property tax bills. The Town Hall need to see the Catastral value/ ‘valor catastral’ for the land.
 
On the IBI you can find 3 values, Valor Catastral Construccion, Valor Catastraol Terreno and Valor Catastral Total’
 

What is IBI?

‘IBI or “Impuesto sobre Bienes Inmuebles” is a municipal property tax in Spain that is paid each year to your local council. I.B.I is the equivalent of the council tax in the UK.’
 
For a rough calculation of the Plusvalia – look at : https://www.foro-ciudad.com/plusvalia-municipal.php
 

Will I need to pay a reservation fee as well as a deposit? What is the normal procedure in your opinion?

It is normal to pay a 10% non refundable deposit. Some agencies charge a 1% reservation fee to remove the property from the market for a short period of time whilst the buyer´s lawyer can check the property documentation and then draw up the official deposit contact for both parties to sign with a payment of the remaining 9%. Others, prefer to accept a full 10% deposit (with any legal checks to be made prior to the payment) The first buyer that pays the 10% deposit in full with secure the house. 
 

Is it recommendable for both buyers and sellers to have their own lawyer?

‘The buyer should get legal help. Depending on the age of the house – it will be a very good idea to get a professional to check the house structure etc. This can be an 'aparejador''/surveyor or technical architect, architect/ arquitecto, engineer/ingeniero etc.   
 
The seller does not run the same risk as the buyer, so the use of a lawyer is optional (if the property paperwork is in order).  It is recommended that the seller includes in the purchase deed/escritura de compraventa that the buyer has had all the time and opportunities to check out the house and that the buyer knows the condition of the house. Therefore, cannot claim any damage if any defects will be found after the date of purchase.’
 
 
The Notaries have made a good book about buying and selling houses. Check this public link:
 
https://www.notariado.org/portal/documents/176535/0/Para+informar+en+detalle+a+todos+los+ciudadanos+interesados+en+la+adquisici%C3%B3n+de+una+vivienda+con+pr%C3%A9stamo+hipotecario%2C+el+Consejo+General+del+Notariado+ha+editado+el+folleto+_El+gran+paso_+comprar+una+vivienda.+%C2%BF.pdf/88baf3fe-9bd1-d77d-773c-db1bce08f1be?t=1565770333592
 

What paperwork needs to be completed after the sale has been realised at the Notary?  For the Buyer?

‘The buyer must:
 

• Prepare and present the M600 ITP (paying the transfer tax)
• Present the purchase deed/escritura and copy of the M600 in the Land Registry/registro de propiedad
• Present the Escritura at the Town Hall/Ayuntamiento to be 100% sure that they have been notified of the change of ownership
• Utilities - make sure that they take over existing contracts with electricity, water etc – or make new ones. There might also be a Community that they have to notify.’

 

For the Seller?

The seller must:

• Present the purchase deed/escritura at the town hall to get the Plus Valia calculated. This must be done within 30 days from signing the sale.
• The seller should contact the Town Hall to get his name removed from the “catastro” to avoid paying next year’s property taxes. Etc. The tax for the present year is always the seller’s liability.
• Utilities– cancel the contract with electricity, water, community, telephone etc.’

 

Overall, is the individual responsible, the agent or their legal team?

‘It is always the “Sujeto pasivo” that is liable (the buyer and the seller) – they can claim damages against any lawyer. That is why the buyer must make sure that there is a written contract with any lawyer stating exactly which work has been assigned to the lawyer.’

 
The above information has been compiled purely as a general guide to assist our buyers and sellers; some personal opinions may differ between professionals in the sector. Various specialists in Spanish paperwork offer a complete package that will ensure that all the legal purchase obligations are fulfilled on behalf of their clients. For further specific enquiries please refer to the range of qualified professionals listed as our ‘Recommended Professionals’.
                                                    
If you have other questions that you would like to be added to this section please contact info@volcanicaproperties.com, we value your feedback.