Sellers Guide
DOCUMENTS NEEDED
Nota Simple – a document from the Land Registry that must be less than 3 months old, which gives up-to-date information on the owners, the property, outstanding debt etc.
Latest Property Ownership Tax Invoice (IBI – Impuesto Sobre Buenes Inmuebles)
Copies of recent Utility Invoices
Energy Performance Certificate
DNI Card (For Spanish Owners)
Passport For Foreign Owners)
NIE Number Document (For Foreign Owners)
Title Deeds (Escritura)
Details of Community Charge (comunidad) if on an urbanisation or for an apartment
Decide on the Asking Price
This is a very important decision and a good reason why you need a well-informed local estate agent to advise you.
Remember that the most important factor here is what the market dictates, so it important to know what other similar properties have been selling for.
Do not decide on a price because you have seen other similar properties advertised at that price, because so many property owners ask for ridiculously high prices and hence, waste their time and the estate agent’s time. Please do not be one of those.
Do not decide on an asking price because you need or want a certain amount of money to say, buy another house or pay off a mortgage.
This is often hard for vendors to accept, but unfortunately, what you need or want is irrelevant when deciding on a selling Buyers will not pay a price because that is what you want; they will pay a price that is fair in the current market.
Accepting an Offer
Once an offer has been made, let us negotiate on your behalf to find a price that is satisfactory for both you and the buyer.
Private Purchase Contract (Compromiso de Compraventa)
As soon as you have accepted an offer we will keep marketing your property until the buyers have transferred a Reservation Fee (usually between 3,000€ and 6,000€) to their solicitor.
The buyers and vendors must sign the Private Purchase Contract which will state a date by which completion of the transaction must occur at a Notary Public. This document will be drawn up by the lawyers.
After this has been done, if the buyers decide to withdraw from the purchase, they will forfeit their deposit. The document needs to stipulate that if legal or structural problems are found with the property that cannot be overcome, the deposit will be returned.
If the vendors withdraw, normally they will be obliged to pay double the amount of the deposit to the buyers, unless otherwise agreed between the two parties.
Inventory
If furniture and other house contents are included in the sale we will draw up a detailed ‘Inventory’ to be signed by both buyers and vendors.
Reservation Fee Document (Contrato de Reservación)
As soon as you have accepted an offer we will keep marketing your property until the buyers have transferred a Reservation Fee (usually between 3,000€ and 6,000€) to their solicitor.
Foreign Exchange Companies (KEY CURRENCY)
In order to take the sales money out of Spain, without question, the simplest and most cost-effective method of transfer is to avoid the banks and opt for a non-bank foreign-exchange specialist.
There are a number of reasons why currency brokers are attracting custom: better rates, speed, low or no fees and better service levels.
Customers want to be able to manage their finances on the go and send money around the world quickly and efficiently with the help of their own dedicated expert.
But of course, the main reason that more property vendors are looking to specialist currency brokers to manage their currency transfers is that they can get access to better exchange rates.
Currency traders will typically offer exchange rates of up to 4 per cent better than high-street banks – a difference of £4,000 on a £100,000 deal.
We can recommend KEY CURRENCY to you who are well-aware that because we recommend more than one company to our sellers, they have to offer you their best deal to win your business.
Property Check
Prior to completing the transaction, we, on behalf of the buyers, will check the property to ensure it has been left in good condition and if there is an inventory, to ensure that all items have been left.
Completion of the Sale
This occurs at a Notary Public on a date agreed by the buyers and vendors as stated in the Private Purchase Contract.
It is a very straightforward part of the process and we will be there with your lawyer to offer support and help.
If you have given your lawyer a Power of Attorney, you do not even need to attend.
Both parties and the Notary will sign the new Title Deeds (Escritura), you will hand over the keys to the house and you will receive your money by cheque or bank transfer.
Lawyer
There is no legal requirement for a seller to appoint a lawyer, but as an estate agent we would always recommend taking appropriate advice and guidance.
You definitely need the help of a lawyer if you have made changes to your property that are not included in the Title Deeds (Escritura) or if any of the documentation you need is missing.
You will also need someone to calculate the Plusvalía tax – see below for details.
Energy Performance Certificate
In compliance with European directives on energy and environmental issues, the owners of existing homes must provide potential buyers with the property’s Energy Performance Certificate, which must be issued by a qualified technician.
The cost of this certificate varies depending on region and size of property, but would normally cost upwards of 200€.
Mortgage
Vendors must also pay the fees for the cancellation of any mortgage on the property.
Local Municipal Tax (Plusvalía)
This is a tax charged by the town-hall (ayuntamiento) when a property is sold.
It is based on the increase of the value of the land from the date of purchase to the date of the current sale. It has nothing to do with the sales price.
The amount will be calculated by the local authorities based on the rateable value of the property and the number of years it has been owned by the vendor.
Capital Gains Tax (CGT)
The vendors will be responsible for the payment of this tax which is based on the increase in value of the property from the original purchase date to the date on which the current sale is made – less related taxes, expenses and other costs.
3% Withholding Retention
There is a risk that a non-resident will leave the country soon after the sale, raising a question mark on their tax compliance. To avoid such a scenario unfolding, a buyer’s lawyer is forced, under law, to withhold 3% of the agreed sales price and pay it into the Spanish Tax Office (AEAT). The Notary public witnessing the sale will ensure this is carried out.
Two scenarios unfold dependent on the profit made:
If a vendor has made a profit smaller than the retention, then he is entitled to claim back the difference for which there is a deadline of 3 months.
If the profit exceeds the 3% retention, a non-resident will be expected to pay the remainder within 3 months of the sale.
Residents (In detail)
If you are a permanent resident of Spain you will need to declare your capital gains as part of your annual tax declaration.
If you are under 65 and resident in Spain you will not have to pay CGT if:
You are selling your main residency and you are reinvesting the total proceeds into another property in Spain, within 4 years of the sale.
You have lived in the property for 3 years or more.
You must declare your intention of re-investing the proceeds into another Spanish property on your tax return.
If you do not re-invest all of the proceeds of the sale into another Spanish property, you will be taxed on the amount that has not been invested.
Vendors over the age of 65 will not be liable for CGT on the sale of their main property, even if they do not plan to reinvest their sales proceeds into another Spanish property:
If the person has lived in the property for more than 3 years.
If the person can show that he/she has been a tax resident during this time.
Vendors over the age of 65 may also be exempt from CGT on the sale of any other property or asset:
If the full amount is invested into a pension annuity (Renta Vitalicia).
Up to a maximum re-investment of 240,000€.
Disclaimer
Please note that the information given above does not constitute any form of financial advice. We advise you to consult with a fully qualified lawyer and tax specialist who can advise you based on your own special circumstances.
