Buying Property in Spain – What are the costs?Things you need to know when you sell a property in Spain
Capital gains.- This tax is calculated by the difference between the sale price and the purchase price, having deducted all the necessary costs related to the respective purchase and sale, and adjusted by Spanish indexation relief. The tax rate is 20% for 2015 (19% in 2016).
When the property is sold by a non-resident, the purchaser has the obligation to withhold 3% of the sale price and pay it to the tax office within one month from the date of the purchase. This is considered as a payment on account of the total tax payable by the vendor. If the capital gains tax payable by the vendor exceeds the 3% tax withheld, the balance is paid to the tax office within four months from the date of the sale, and if lower the vendor will be able to reclaim for a tax refund.
Plusvalía Tax.- This local tax is paid to the Town Hall where the property is located, and is based on the increase of the value of the land between the date of purchase and the date of sale. The tax rate increases in accordance with the number of years the property is owned, with a maximum of 20 years.
Other costs.- Normally there are no notary fees or land registry fees, as they are payable by the purchaser, unless otherwise agreed between the parties.
Professional fees for dealing with the sale are based on the value of the property and the complexity of the transaction and, as for the property purchase, they are normally between 0.5% and 1.5% of the sale price. If the property has a Spanish mortgage and has to be cancelled prior to the sale, there will be notary fees and land registry fees payable by the vendor, which are normally withheld by the purchaser.