Buyers Taxes and Expenses to purchase a property in the Costa Blanca, Spain

Taxes on resale properties

A resale property is an existing property that is being sold by the current owner. The purchase tax for a resale property is 10%.

Taxes on new developments

On a new development, the developer is the vendor and properties are categorised as off-plan or finished properties.

Off-plan properties are sold before construction commences, and finished properties are sold once construction is complete.

In both cases the payment structure will vary depending on the developer's policy and how far construction has progressed. We always provide clear information about payments, periods, quality of the materials, plans, etc.

In this case the taxes are 10% of the agreed price plus 1% notary and 1% land registration fee.

In some instances there may be an addition charge  for setting up a new service supply contract for water and electricity of approx 3.000 euros.

Vendors Taxes and Expenses to Sell a Property in the Costa Blanca, Spain

Plus Valia (CAPITAL GAIN)

Every vendor is liable to pay to the local town hall a plus valia tax. It's calculated calculated on a sliding scale-based on the years or months you owned the property times the cadastral value of the land. (Even if you own an apartment, it will be calculated on the proportion of the land on which the urbanisation stands). Usually, it's not a very big expense, but something to consider.

Income Tax

Only paid if you have received an income on the sale of your property, and different tax is applied if you are a nonresident (24%), resident (19%) if you are an EU/EEA citizen, or if a company (25%) is selling. All the costs you have incurred, both in the purchase and the sale (notaries, registry, lawyers, purchase taxes, agent commissions, etc.), are considered. Only the remaining difference is considered income. Also, reforms, depending on which ones, can also be considered. Of course, you need to have in hand all the official invoices for every single concept.

Real Estate Agency Fees

When using the right professional real estate firm to sell your property in Spain   can increase the chances and speed of your sale and achieve the best market value for your property.In the Costa Blanca, the agent's fees in a sale process are always paid by the vendor, never the buyer, and are established in advance when listing the property. It's important to remember that the agent, the same as a lawyer or any other professional, must apply 21% VAT to the quantity when issuing their invoice.

Lawyer Fees

It is recommended to use a lawyer when selling especially if you are returning to your home country as any loose ends can be tied up giving you piece of mind. 

Mortgage Cancellation Fees

If you have a mortgage on the property all the costs and fees to cancel the mortgage are paid by the vendor.This can be bank commission for early cancellation of the loan, notary, and registry fees for cancellation.

Government Retention of 3% from the sales price

If the vendor is non fiscal resident the buyers is required by law to deduct in the notary 3% of the purchase price and deposit this amount in the tax office, after the title deed is signed, in the vendor's name. After the sale, the vendor can apply to the tax office to ask for the return of some or all of this amount  to the vendor's bank account. The refund process can last for approximately 6 months, and the money will be deposited in the vendor's account, minus any unpaid taxes if such existed. Usually, if you had an income in the sale, the income tax will be directly deducted from the retention. 

If you would like anymore information regarding selling a property in Spain, please do not hesitate to get in touch with us at: info@dampierinternational.com