Selling properties in Spain – Taxes, expenses, and process
If you have decided to sell your property, please pay attention to the following information:
1.-. CHECK THE DESCRIPTION IN THE PROPERTY DOCUMENTS
- THE PROPERTY DEEDS: Check in the property deeds that the property appears correctly. The properties deeds must have a perfect description of the construction or constructions on the property.
It is quite common that properties, that have been owned by different owners for many years, have modified with extensions (a new room, closing the porch or terrace, etc.), or with new constructions (a garage, a pool, a guest house).
If the real size and constructions do not coincide with the description in the deeds, do not be worried there are processes that can be done and ways to sort it out!. But you must know them in the same moment in which you take the decision to sell.
For example: I have a 120m2 house with a 50 m2 pool and a garage converted into a guest house. In the deeds the house only appears as 120 m2, but not the pool, and the garage is a “garage” not a guest house. The deeds must be updated.
NOTE: We are not talking about the internal description of the house, just the perimeter of the property known as “built size” (in Spanish, “superficie construída”). It is not necessary that the deeds show the real description or distribution inside the house. If you have modified the interior of the property by changing inside walls, then will not be necessary to update the deeds, it is enough to declare upon completion to the notary. For example, the deeds show that there are 4 bedrooms and you converted them into 2 when you bought the property. In this case it is not necessary to update the deeds. As the owner, you have the freedom to reform inside the property.
- PROPERTY IN CATASTRO (also known as “SUMA” or “IBI”, or “COUNCIL TAX”: In the same way as in the deeds, the property must be registered in “Catastro”(SUMA) as it is in reality. The SUMA bills every year shows the actual size of the property. You must check then if the Catastro records show the actual size of the property, including whatever modifications or extensions have been done.
Remember that the Catastro office calculate the Council Tax following the size of the property, taking into account all of the construction components like the house, pool, garage, etc. If you have made extensions on the property, and you have not informed Catastro office, the right moment to do it is when you decide to sell.
NOTE: Please, follow this example: You purchase the property in 2006, and in this moment the property was a 120m2 house. This is what was also shown in the deeds and in the SUMA (Catastro) bill. For this reason the SUMA bills (IBI) were 300 EUR.
In 2007 you built a 50 m2 pool and a 40 m2 garage. You did not declare them to SUMA. If you had done the bills from SUMA would have been increased from 300 EUR to 350 EUR (approximately), 50 EUR more due to the new constructions.
Now if you would like to sell your property you must update the information registered in the Catastro Office . You can then inform the Catastro Office about the extensions that you have made and then, they can ask you to pay the 50 EUR (approx) difference for the non-declared extensions up to the date in which they were built (2007, in this case).
I have extended my property during the time in which I have been the owner, or, simply, my deeds and the Catastro Office do not make coincide with the real size of my property. How do I sort it out?
COME TO OUR OFFICE!. We will instruct you ON how to update your documents, and prepare them for the sale in a FREE – OF- CHARGE MEETING.
2.- PROVE THE LEGALITY OF THE CONSTRUCTION:
To sell the property, it is compulsory to get proof of the legality of the property. TWO documents can help you in this way:
- Habitation Certificate (CH)
- No Infraction Certificate (CNUI)
A) Habitation Certificate (CH): We all know that the CH is a document which shows that property has been constructed respecting and fulfilling the Spanish constructions Laws.
This document is also needed to connect water and electric to the property, when you first acquire the property and to guarantee the changes in the contracts and the supply for the second and successive owners.
CH used to be valid for 5 years, and must be renewed any time the property is sold or transmitted, showing the names of the current owners.
Look at your CH, and check:
1.- Is your name on the CH ? / 2.- Has the CH expired? /
B) – No Infraction Certificate .- This is called “Certificado de No Infracción Urbanística”. This is a certificate made by the Town Hall, establishing that the property is free (or not), from any fines on the property, or on any of the constructions added to the property.
Why is this Certificate necessary to sell my property?.
It will help your sale go smoothly if you have all of your documents in order such as certificates that show your property is free of any debts or fines on the house or extensions on the property. It builds confidence in the possible buyer and his own Solicitor. And, if there is a fine affecting your property for its construction, or its extensions, IT WILL NOT BE SHOWN IN THE DEEDS and / or the rest of documents from the property. This information can only be obtained in the local Town Hall of the area.
From now on , this certificate is ESSENTIAL to the sale the property, and must be obtained from the owner before completion.
How do you get the “Certificado de No Infracción Urbanística”?: The best way to obtain it is to go in person, or through your lawyer (with an authorization signed by you) to the Construction Dept. Of the Town Hall (“Departamento de Urbanismo”), and ask for it.
3.- PERSONAL TAX SITUATION – CAPITAL GAINS TAX.
Are you paying your taxes in Spain as a Spanish resident? Or are you paying your taxes in your country of origin (UK, France, Germany)?.
Please, be careful of this. You may have been living in Spain for many years, but not paying your taxes, or not paying taxes as Spanish resident (Modelo 100 IRPF). In this case, when selling you will not have the exemptions and reductions of Capital Gains tax as the Spanish doo and 3 % of the sale price may be retained .
Ask for proper tax advice before deciding to sell your property.
Take this into account: you have to present the following DOCUMENTS BEFORE SELLING :
Title deeds of the property (Escritura): If possible, the ORIGINAL ones. With the correct and updated description of the constructions.
Council Tax Bill (IBI – SUMA) .- With the correct description of the constructions.
Water and electric bills.- the most recent ones.
Habitation Certificate also called “LICENCIA DE PRIMERA O SEGUNDA OCUPACIÓN”.
No Infraction Certificate .- This is called “Certificado de No Infracción Urbanística”.
Community of Owners Certificate (if the case) showing you are up to date on Community Charges.
Original NIE & Original Passports
- TAXES : You have to present the following tax documents:
- Models 210 or 214 from the previous 3 years. If non Spanish Tax resident
- Model 100 from the 3 previous years. If Spanish Tax Resident