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TAXES TO BE PAID AS A RESULT OF THE SALE OF A PROPERTY IN SPAIN.

 

This editorial aims to explain the taxes to pay when selling a property in Spain. 

We are assuming the case of a person selling his property in Spain (since, if the property is sold by a company, this will be different). 

The taxes to be paid as a result of the purchase and sale proceedings will be the following: 

−BUYER party is liable to pay Transmission Taxes on a percentage of 7% on the purchase price as shown in the Property Title Deeds.

−SELLER party (either if he is a resident or non resident in Spain) is liable to pay CAPITAL GAINS TAXES, as the Gain is considered as INCOME. The percentage to pay is 19% on the net profit made when selling. The Net Profit is calculated taking into account the sale price minus the price paid when buying the property that is being sold. This purchase price can add the expenses incurred when completing the purchase Title Deeds, that is to say: Notary, Land Registry fees and Taxes paid originally. 

If the seller is a non resident in Spain, the buyer will make a retention of 3% on the sale price on the completion of the property Title Deeds. This 3% will be paid by the buyer on behalf of the seller on account of the Capital Gains Tax to the Spanish Tax Authorities. Subsequently, the seller will have to regularize the situation, regarding the calculations of the correct amount to pay as Capital Gains Tax, resulting in the obligation of having to pay for the difference in the resulting amount to pay, or in the obligation of having to present a form to claim a refund of the amount paid to the Tax office in case there has not been any profit at all. 

−INCREASE IN THE VALUE OF RESIDENTIAL LAND TAX (PLUSVALIA) This is a Municipal Tax and the general rule is that the party liable to pay for this tax is the Seller. However, it is possible that the tax is paid by the buyer party if that is agreed between both parties. 

To determine the amount to pay is a complicated issue, since several points are taken into account. Therefore, it is advisable to check previously with the corresponding Town Hall previously to the completion of the purchase and sale, in order to know how much the amount to pay is. 

The Town Hall, in order to fix the amount to pay will have into account the land rateable value (valor catastral) and the number of years elapsed between the purchase and sale of the property, which are multiplied by some municipal coefficients. The longer the property has been in possession of the seller, the higher the amount to pay. 

Should you require further information regarding this or other matters, please feel free to contact us either at our offices located at the COMMERCIAL CENTRE TORREGROSA, Avenida Jorge Martinez Aspar Number 73, on the telephone: 966731353 or sending an e-mail to us on: info@fontanals-solicitors.com. 

We would like to remind you that in order to benefit of the FREE CONSULTATIONS at our offices, you will be required to show your Membership Card provided by Banco de Valencia.

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