Costs when selling a property in Spain

If after a long thinking you have finally made a decision to sell your house in Spain, there are a few things you need to know in advance, one of them is the cost that comes with this sell.

Main costs for selling a property in Spain are:

1.       Agency fees

2.       Legal fees

3.       Capital Gain Tax

4.       Local Capital Gain Tax

5.       Mortgage Cancelation fee

1.       Agency fees: typically between 3% and 7%. In Jávea and the Marina Alta region is usually a 5%

2.       Legal fees: If you decide that you want to have a solicitor, this might vary between charging a percentage of the sale, usually between 1-2%, or a fixed fee between 1500-2000€

3.       Capital Gain Tax: This is called “Plusvalía” and it’s calculated by applying a percentage to the profit of the sell. This profit is calculated by deducting the selling price minus acquisition cost. There are 2 types:

o   Spanish Resident: the tax rates are progressive - starting at 19% for gains up to €6,000 (£5,106.10) but increasing to 21% for gains between €6,000 (£5,106.10) and €50,000 (£42,550.55). Any gains over €50,000 (£42,550.55) will be taxed at a 23% rate

o   Non-Resident: you will be subject to a flat rate of 19%. However, during the sell process, the buyer is obligated to withhold a 3% of the sell price on account of the Capital Gain Tax. If the 3% exceeds the final tax due (for example, if the property is sold at loss), the seller can claim the 3% back by submitting the capital gains tax return

4.       Local Capital Gain Tax: “Plusvalía Municipal”, this is a municipal tax imposed on the increase in the value of an urban land since the time when you acquired the land until you sell it.

o   Coefficients don’t usually exceed these limits:

§  1-5 years period – 3,2%

§  Period up to 10 years – 3,5%

§  Period  up to 15 years – 3,2%

§  Period up to 20 years – 3%

5.       Mortgage Cancellation fee: If you are selling a property with an existing mortgage, you will need to account for mortgage cancellation fees, which can be a significant expense. The penalty usually ranges from 0.5% to 1% of the remaining mortgage balance, depending on the terms of the mortgage contract.