Sellers Guide
Selling a property in Spain
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It’s not mandatory, but it’s recommended to appoint a solicitor to give you advice and oversee the legal and administrative aspects of the sale.
In Spain, el notario plays a crucial role in managing the paperwork, taxes and registering the sale with the Land Registry. They play a neutral role in the transaction and are there to make sure everything is done according to the letter of the law.
The Offer
Once The Offer Is Accepted
Once you’ve accepted an offer, you’ll need to agree on a notary with the buyer. There are around 3,000 notaries in Spain and they all charge the same standard rate.
Here’s what you (or your solicitor) will need to have ready to make sure the sale proceeds smoothly⁵:
- The property’s title deeds
- Copies of utility bills
- Receipts for local municipal tax (IBI) paid for the property
- Your residency card (if applicable)
- An inventory of furniture and other fixtures which will be included in the sale
- Details of any relevant community statutes.
- (If not using a lawyer) you will need to cancel any outstanding mortgage you may have on your property and confirm the notary date with your bank
- Provide Modelo 100 to confirm tax residency
Once the buyer’s solicitor has completed all the necessary due diligence checks, it’s time to sign the deposit contract. This preliminary contract will be prepared by the buyer’s solicitor, and both parties will sign. A date is specified for the completion of the purchase.
At the same time the preliminary contract is signed, the deposit will be paid by the buyer. Just like in other parts of the world, the deposit is used as a firm sign of commitment to the transaction. We’ll cover how much a deposit typically is in Spain, and what happens to it if either buyer or seller change their mind, in just a moment.
To finalise the sale, a meeting will be held between the buyer, seller and their respective legal representatives. The notary will also be present. This is where the contract of sale (escritura de compravento)
The notary then informs the Land Registry of the sale and sends over copies of the title deeds. The final balance is transferred to you, and the buyer gets the keys to the property.
But what happens to the deposit if either party changes their mind?
- If you (the seller) pull out of the deal, you may have to pay the buyer twice the amount of deposit they paid. This is seen as a form of compensation.
- If the buyer backs out of the purchase, they will lose their deposit.
The time it takes between putting your property on the market and finally handing over the keys can vary in Spain. It depends on where your property is located, and demand for your type of property in the market.
Fees and taxes
Selling A Property In Spain
Now we come to the important part – how much it will actually cost you to sell a Spanish property.
Let’s run through the main fees and taxes you need to know about.
The good news for sellers is that in Spain, the buyer will pay many of the fees associated with the sale. But you will still have some fees to pay.
These include the following:
- Estate agent fee – if you use an agent to sell your home, expect to pay around 3-6% of the sale price in commission
- Fee for energy performance certificate – this can cost between €150 and €300.
If you don’t live in Spain and have a Spanish bank account, you may also face fees when transferring the proceeds of the sale back home to the UK. We’ll look at how you can avoid these fees, and get a fairer exchange rate for international transfers, later in this guide.
Property taxes for sellers
Selling A Property In Spain
On top of fees, owners of Spanish properties may also have certain taxes to pay when they sell up. Here are the key taxes to watch out for:
Capital gains tax (CGT) is due on the profits made from selling a property in Spain. So, the difference between the sale price, and the price you initially paid for the property.
The rate of CGT depends firstly on your residency status. If you’re a fiscal resident, it’s set at a flat rate of 19%. If however if you are not a resident the rate is 3%.
But if you’re a Spanish resident, different rules apply. The rate of CGT is calculated on a sliding scale depending on how much profit you make and also your age.
However, there’s an important exemption which could help you avoid paying capital gains tax altogether.
You can apply for it if you meet all of these three conditions
- You’re a Spanish resident
- You’ve lived in the property you’re selling for at least three years
- You plan to use the proceeds of the sale to buy your new main residence in Spain.
You may also have heard of another Spanish property tax known as land appreciation tax, or plusvalía municipal. This is a tax due on the increase in value of a property since it was last sold. It’s calculated based on the value of the property and other factors, and rates are set by the local municipality. It is often paid by the seller, but you can negotiate with the buyer over who pays it.
However, there’s important news for sellers on the plusvalía tax. In October 2021, the Spanish Constitutional Court temporarily annulled the tax, due to a ruling that the way it is calculated is unconstitutional. Whether or not it will be reinstated remains to be seen, but for now – sellers won’t have to pay plusvalía when they sell a property in Spain.
The last but perhaps most important thing to think about when selling a property in Spain is how you’ll transfer the money back home.
Unless you have a Spanish bank account and plan to keep the money there, you’ll be considering using your bank to make an international transfer to the UK.
Pause before you do this. Banks tend to charge high transfer fees and apply an expensive mark-up to the exchange rate. With such a large sum to be transferred, this could end up costing you a small fortune.
Luckily, there’s a better way. Send your money to or from the UK with Lumon and you’ll get the real, mid-market exchange rate. This means no markup or margin – only the fair rate you’ll find on Google or currency authority sites like XE.com. Even better, you’ll only pay a small, transparent transfer fee.
Should you be unsure of any of the above please do not hesitate to contact us via telephone or email