Selling Property in Spain 2019Taxes, Mortgages & Other Charges

Selling Property in Spain complete and extended guide

A transfer of property in Spain can function differently from other jurisdictions and so it is important to be aware of the assumptions that the law makes with regards to responsibilities and liabilities for payments of taxes and charges when selling property in Spain.

The main taxes and charges connected with property ownership include the following: IVA or ITP (VAT on new or second-hand homes) Plusvalía (Capital Gains Tax), IBI (Council Tax), Comunidad Charge (If in a shared building or urbanisation), utility bills and, of course, any mortgage on the property.

ITP

Where the property being sold is second-hand then the tax payable is ITP and the rate is typically between 7% and 8% depending in which region the property is located as ITP is set by the regional government rather than at a state level and so varies a little as between each region.

When buying a new property IVA is paid on the purchase price to the developer or promoter when buying the property. It is then the responsibility of the developer or promoter to make their IVA returns to Hacienda (Spanish Tax System) in the usual way.

If a second-hand property is being purchased then it is the responsibility of the purchaser to pay this tax directly (using form 600) in the local tax offices within one month of signing the deeds.

Plusvalía

This tax, equivalent to Capital Gains Tax with regard to property, is ordinarily the responsibility of the vendor as they have benefited from the increase in the value of the property since they previously bought it. This is not written in stone however and should the two parties come to an agreement it can become the responsibility of the purchaser to discharge this liability. In fact, where the vendor is a non-resident this liability actually shifts to the purchaser.

Of course if the vendor is resident and reinvests the funds in another primary residence then there is no liability for plusvalía.

If however, the vendor is a non-resident then the purchaser is obliged to retain 3% of the purchase price and pay this to the tax office. Evidence of payment is demonstrated with a stamped copy of form 211 and the vendor can then deduct the same amount from the purchase price.

IBI

It may be the case that the vendor has already paid the local Council Tax or IBI (Impuesto de Bienes Inmuebles) for the full year, yet will only be in the property for a portion of that time. If that is the case then upon facilitation of receipts for payment of the tax, a vendor will be entitled to add the extra amount paid to the price of the property. In any case the purchaser will be anxious to see receipts for the previous and current years IBI as they are otherwise liable.

Are you instead looking for a guide to buying property in Spain. Don’t look any further, we are English-speaking local experts: use us!

Related Services

23 Lawyers Offering Property Sale Services in Spain

Testimonials for our Property Sale service
  • Martin Clifton
    Martin Clifton, Alicante

    My transaction sometimes wasn’t the easiest but José went out of his way to deal with any difficulties and always explained things clearly and concisely. He was proactive and always kept me in touch with how matters were proceeding.


    Dec 05, 2019
  • Charles Wilson (Benidorm)
    Charles Wilson (Benidorm)

    Juan is simply the best. He has helped me so much. 100% recommend to any one thanks Juan!!!


    Apr 26, 2018
  • YS
    YS, Dubai

    Very Professional. Excellent attitude.


    Reasonable price. Good attention to details.


    Jun 16, 2017
  • Trevor Taylor
    Trevor Taylor, England

    I was put at my ease straight away, never hiring a Spanish lawyer before, I was cautious, but Francisco guided me through the process effortlessly.I thought my case would be tricky and I on my own would never have completed without him. He was a star.


    I have recommended him to some friends of mine who want to sell their business. As for value for money, he was spot on, and very approachable .Full marks from me.


    Aug 22, 2014