Want to sell your Spanish home? The details you need to know before selling your overseas property are provided here. First and foremost, be prepared for a potentially lengthy process. Research conducted by property valuation company TINSA found that the average time it takes to sell a property in Spain is nearly 10 months.
Should you sell your Spanish home now?
In the year leading up to the third quarter of 2021, real estate prices in Spain increased by 4.68%, albeit at a slower rate than the previous year. Do your research before deciding whether or not to sell your Spanish property by consulting a local estate agent.
Finding the Right Spanish Real Estate Agent
To begin, you should talk to people you know who have recently hired an estate agent and ask for recommendations. If that’s not possible, talk to several before settling on one. Find someone who has represented British clients before, and at the very least, hire a member of a professional organization like the FNAIM, SNPI, or UNPI.
Agent commissions for real estate transactions typically range from 3% to 6%, though this number can be higher in hot real estate markets or affluent neighborhoods. Make sure you understand what additional costs you may incur in addition to the fee.
Nothing prevents you from working with multiple real estate agents, but signing an exclusive contract with one should help you secure a lower commission rate. Avoid being trapped in a failing relationship by placing time constraints on any exclusivity clause. If you use multiple real estate agents, make sure they all list the property at the same price.
Should you hire a real estate agent in Spain if you plan to sell your home?
You don’t need to do that at all. Many of the major real estate websites, including Esales International, fotocasa and idealista, also have English-language versions, so it should be possible for you to put up your own “Se Vende” signs and post the details online. If you have the time and patience to show potential buyers around the property, selling it yourself will save you the costly commission. However, whether you like real estate agents or not, they do have the resources necessary to make the selling of your home much less stressful.
How to Locate a Spanish Lawyer
While it’s not required, it’s highly recommended that you retain the services of an English-speaking solicitor to manage the sale and provide tax and other legal advice. Once again, it is advisable to get a recommendation from someone. An English-speaking lawyer directory is available from the British government.
Go see a notary immediately.
A notary is a neutral third party who will confirm that all taxes and fees have been paid and who will register the property with the Spanish Land Registry, as agreed upon by both you and the buyer. The notary is impartial, representing neither you nor the buyer’s interests like your lawyer would. Basically, the notary’s job is to make sure everything is done properly. There is no need to shop around for a notary because all of Spain’s three thousand legal professionals and civil servants follow the same fee schedule.
You, the purchaser, and your attorney or other agent with authority to sign on your behalf must all appear in person before the notary public to finalise the transaction. Before you sign any papers, they’ll double-check everything with you to make sure it’s in order. A copy of the deed and notification of the transaction will be sent to the Land Registry by the notary.
Purchasers typically foot the bill for notary fees these days, which are calculated as a percentage of the purchase price and included in the deed’s final total.
Get your paperwork in order.
Having all of your paperwork in order will make the process go more quickly and easily.
It’s necessary to have:
- Documents proving ownership of a property.
- Property tax revenue collected at the municipal level (impuesto sobre bienes inmuebles or IBI)
- The originals of recent utility bills
- Specifics of the local laws
- Detailing the furniture and other items that will be included in the sale.
- If you are eligible for residency, please bring your residency card.
To sell a home in Spain, one must first go through the following steps:
- In a positive turn of events, the purchaser and the purchaser’s legal counsel will do the bulk of the work.
- If the solicitor’s due diligence checks turn out to be satisfactory, then he or she will draught a deposit contract for the parties to sign. Each party’s commitment to the deal is guaranteed by the other’s payment of a deposit (typically 10% of the agreed sale price) and a date is set for the purchase. The deposit is non-refundable if the buyer backs out. In the event of your (the seller’s) breach of this agreement, you may be required to compensate the buyer by double the amount of the deposit.
- You and the buyer will meet with the buyer’s legal representatives and a notary public to finalize the deal. In the event that you are unable to appear in person, appointing a legal representative with the authority to act on your behalf is required. The notary will report the transaction to the Land Registry and provide a copy of the deed to the government agency.
Property sales expenses in Spain
You, the seller, will probably have to fork over cash for:
- Commission for real estate services (typically 3-6%).
- Certification of energy efficiency (for around €150-€500).
- If the sale price is higher than the purchase price, you must pay capital gains tax
Added Value Tax
It’s worth noting that foreign exchange solutions may help you save time and money if you decide to send the proceeds of the sale back to the United Kingdom.
Gains tax on investments
You will owe capital gains tax (CGT) on the difference between the amount you receive from the sale and the amount you put into the property. Fees for the real estate agent and other selling expenses can be subtracted from the final figure. The tax office also determines an annual allowance. Gain size determines the CGT rate, which ranges from 19% to 23%.
If you sell your primary residence in Spain and immediately purchase another primary residence, you may be eligible for a CGT exemption after three years of residency (which you must then live in for the next three years). You’re free to purchase a property in any EU country, but you should still consult a financial professional before doing so (because the rules are subject to change).
Plusvalía
Plusvala is a municipal tax levied by the municipality and determined by the land’s rateable value (also called its “cadastral” value) and the length of time since purchase. The plusvala is typically paid by the seller and amounts to a few hundred euros at most. The law gives the parties flexibility in determining who will pay the tax, but it must be paid no later than 30 days after the sale is finalized.
Taxes and non-residents
At the time of closing, the buyer must transfer 3 percent of the purchase price to the Spanish tax authorities if the buyer is not a Spanish resident. If you owe capital gains tax, this amount will be subtracted from what you owe. Any remaining balance must be paid in full within 30 days of the sale, or a refund may be requested.
The quickest way to sell your Spanish home
If you want to reduce the average time on the market from 10 months to a more reasonable number, you should put some time and effort into the situation.
Make your house a home by dressing it up with neutral paint, mirrors, plants, and furniture. Keep it airy and bright by erasing any evidence of your pets.
Take high-quality photos of the property and work with reputable real estate agents and international property portals to maximise its exposure.
Put a reasonable price on your home. If you bought a Spanish home in 2007—right at the peak—and now you want to sell, you may have to take a loss. You should be willing to settle for an offer if progress is too slow.
For the convenience of your potential buyers, compile a complete set of all the pertinent paperwork you can find and include it in a sales pack.
