SELLING PROPERTY IN SPAIN Engage a lawyer to protect your interests and ensure a smooth transaction.
1. TAX LIABILITY FOR SELLER
Capital Gains Tax (CGT):
As is normal, profit between the date of purchase and date of sale is taxed at 21%
NOTE: You can deduct the following from CGT:
- Conveyancing costs (with receipts)
- Purchase Tax
- Notary Fees
- Legal Fees
2. PLUS VALIA TAX
That can be from a couple of hundred to a couple of thousand Euros depending on the period of ownership and the size of the plot.
3. SELLERS DEBTS AGAINST PROPERTY/ENCUMBRANCES
The seller must settle debts against his property including mortgage before completion.
If buyer/seller negotiate to take over mortgage it will be cheaper than setting up a new mortgage.
If vendor is not a resident 3% retention of purchase price is held to pay to Spanish Tax Authorities.
This ensures that vendor pays CGT.
After CGT is calculated seller will either receive refund or be billed for difference depending on tax due.