Must-Know Costs for Property Sellers

When selling property in Spain, it’s crucial to account for additional costs. This guide outlines key expenses. Considering these costs in your budget is essential to avoid surprises and accurately determine your acceptable sale price and potential profit or loss.

For a more detailed understanding and personalized advice, it is always recommended to consult a tax professional.

PRE-SALE EXPENSES

NOTA SIMPLE (LAND REGISTRY REPORT)

This document provides essential details about the property’s ownership, description, boundaries, rights, encumbrances, and liens. However, it does not certify the legal status of the property. Cost: €10–€30.

ENERGY PERFORMANCE CERTIFICATE

This certificate assesses the property’s estimated energy consumption and its CO2 emissions and suggests ways to improve efficiency. It does not reflect actual energy costs. Cost: €50–€150.

MORTGAGE CANCELLATION FEE

If your property has an existing mortgage, check for any applicable cancellation fees before selling.

TAXES AND LEGAL FEES

PLUSVALÍA

This tax is based on the increase in the value of the land since purchase. Rates vary by municipality.

IBI (ANNUAL REAL ESTATE TAX)

The seller must pay the property tax proportionate to the current year up to the sale date. This tax is calculated as a percentage of the property’s cadastral value, typically ranging from 0.3% to 1.3%, depending on the municipality. Rates vary significantly based on multiple factors, including whether the property is classified as urban or rural. Additionally, properties located in an autonomous region’s capital may be subject to higher rates.

NON-RESIDENT SELLERS

When a non-resident sells a property in Spain, the buyer—whether a natural person or a company, resident or non-resident—must withhold 3% of the sales price from the final payment to the seller as an advance payment towards the Non-Resident Income Tax (IRNR). Non-residents who make a profit from the sale must declare this profit in the IRNR, with the tax rate at 19%, 

PROFIT TAX

A 19% to 21% tax applies to the profit from the property sale, but certain expenses can be deducted. Home improvements that increase the property’s value—such as expanding usable living space—may be deductible if supported by invoices (not receipts). Additionally, buying and selling expenses, including legal fees and agent commissions, can also reduce taxable profit.

SELLING AS A LEGAL ENTITY

If the property was purchased through a Spanish company for investment purposes (buying, renovating, and selling within 5 years), you only pay 2% in transfer tax (this doesn’t apply to new developments where VAT is applicable). Once 5 years have passed, the owner has 1 month to voluntarily pay the difference in tax. In this case, a legal interest of 3–4% per year (compounded over 5 years) is applied, and no penalty fee is issued.

If the payment is not made within this timeframe, the owner will be liable for the tax difference, accrued interest, and an additional fine of at least 50%.

For the first two years after making a profit, the tax rate is 15%. After that, it increases to 25%. This applies only if the company has active business and assets beyond the property.

Please note that Spanish companies are taxed very differently from natural persons. It is the owner’s responsibility to understand the applicable tax regulations, so seeking professional advice is strongly recommended.