Sales Taxes and Fees
When a property is sold in Spain, although buyers pay most of the costs, sellers are also liable for a number of taxes and fees.
As a seller of a property without a mortgage, you are liable for 2 taxes – Plusvalía and Impuesto sobre la Renta (Income Tax)
Sellers have to pay taxes and costs, depending on:
- period of ownership
- increases in value over the period
- your tax resident status
- income during the year you sell
Plusvalía (MUNICIPAL LAND VALUE TAX)
This is levied by the local Town Council on the presumed increase in the value of the land on which your property stands. It is calculated on the rise in rateable value over the period of ownership. The longer you own a property, the more you pay. But, based on a recent ruling by Spain’s Constitutional Court, if you make no gain, you should no longer be liable for tax. You have 30 days from completion to pay any taxes due. For non-resident individuals, the buyer will retain tax due, as he or she will be liable in case of non-payment.
To obtain an estimate of your local plus valia follow the steps below:
- Follow this link to the Plus Valia Calculcator: https://portal.prpmalaga.es/
- Change to english or the language of your choice found in the top right corner of the web page
- Municipio: select town where property is located
- Fecha de transmisión (date of sale / transaction): enter todays date for example or the date expected for signing of the title deed
Valor catastral total del inmueble:(this value should be taken from your latest IBI receipt)
Valor catastral suelo del inmueble: (this value should be taken from your latest IBI receipt)
Valor de transmision: purchase price
Datos de la adquisicion:
fecha de la adquisicion (date property was purchased by current owner, if in doubt this can be found in your title deed or nota simple)
porcentaje adquirido (% of purchase of each property owner, for example it would be 50/50 if purchased by a husband and wife in which case you will need to complete one row of information for each 50% owner)
valor de adquisicion (purchase price of each share)
IMPUESTO SOBRE LA RENTA – GANANCIAS DE CAPITAL (CAPITAL GAIN TAX)
This is levied by the Spanish Tax Agency on any income earned during a fiscal year. It is calculated on the difference between purchase prices (plus costs and taxes) and sale prices (minus costs and taxes) as a capital gains tax, and levied according to your tax residency status.
|0 – 6,000€ gain||19%|
|6.000€ – 50.000€||21%|
|Spanish residents over 65 years of age who sell their habitual residence (where they have lived 3 years continuously) do not pay personal income tax for the capital gain obtained.||0%|
|Spanish residents under 65 who sell their habitual residence (where they have lived 3 years continuously) and reinvest in another home that is their habitual residence will be exempt from personal income tax in proportion to the amount reinvested. The period to make the reinvestment is two years before or after the sale of the habitual residence. The new home must be occupied within a maximum period of 1 year from its acquisition.||0%|
When buying from a non-resident seller, buyers are required to retain 3% of the sale price to pay to the Spanish Tax Agency on the seller’s behalf.
Mortgage cancellation fees
If your property is mortgaged and the loan will be paid off on sale, any costs are normally paid by the seller.
- If your property is owned by a company, especially one domiciled offshore, calculate the costs of dissolution, taking into account any tax due on the difference between book and sales values.
- If you intend to sell a company, work out how much corporation tax you will be liable to pay.
- If you have inherited property in Spain, consult a lawyer to work out how much tax you will be required to pay and how to transfer title to your name.
- The buyer normally pays all other costs, but sellers should stipulate in the private purchase contract that the buyer pays notary fees or, if not, you will be liable for 80% of these costs.
- Sellers should inform the Cadastre (Catastro) and, if applicable, the community that they have sold a property, so that they are no longer liable for any taxes or fees.
- Sellers should cancel direct debits arranged for the payment of utility bills.