With this article we would like to help our clients and also the public in general and provide more transparency regarding the costs and fees involved when selling a property in Spain, which need to be settled by the seller. Some of these costs do already occur before the property is sold, others are due during the selling process and some need to be settled afterwards.
However, we have deliberately decided not to give specific price indications in many cases, as the costs are very variable and depend on many different factors as, for example, the municipality, the property type or the remuneration of an expert. We would however be more than happy to advise you individually and give you more details, if you wish so.
Nevertheless, henceforth you will find a list of the expenses associated with the sale of a property in Spain.
Costs that occur before selling a property in Spain
- The Habitation Certificate (cédula de habitabilidad in Spanish): if you do not own this certificate yet, it is recommendable to start with the application as soon as possible, as you will not be able to sell your property without it. The costs depend, among other factors, on the surface of the estate. Should you already have a habitation certificate, you just need to check if it is still valid (they expire after approximately 10 years).
- The Energy Certificate or Certificate of Energy Performance (certificado de eficiencia energética – CEE): since 2013 it is compulsory to have this certificate when putting a property on the market for sale or rent. The price for this document depends once again on the surface of the property, as well as on the expert’s fee. Generally, it costs between 80 and 300 Euros.
- A simple extract from the land registry (Nota simple informativa or nota registral), an optional expense: this document is not mandatory for a sale, but it is highly recommendable to have it. If you can show the extract to the potential buyer, it will be more trustworthy. The interested party can look at information about the owners of the property, as well as financial charges or similar. A simple extract from the land registry can be requested online, as well as directly in the property register that has been assigned to you.
- Another optional expense, Home Staging and professional pictures: obviously this expense is not mandatory, but staging your property in the right way and using professional pictures for your advertisements can help you to sell your estate faster and for a better price. If you should choose Nova Gestio Real Estate as your agent, professional pictures would already be included in our services, and, additionally, we also offer Home Staging.
Costs that occur during the selling process of a property in Spain
- Expenses for drafting contracts: should you hire a real estate agent for the sale of your property, the drafting of contracts is normally included in their service, as it is the case with Nova Gestio Real Estate. However, if you choose to sell your property as a private person, it is highly recommendable to hire the support of a specialized administration office or a law firm for the draft of the contracts necessary for the sale, as, for example, a reservation contract, the purchase agreement or a purchase option.
- Mortgage cancellation costs: if there is a mortgage charge on the property that you wish to sell, even if the loan was paid off years ago, the charge needs to be removed from the property in the Land Registry (Registro de la Propiedad). This involves Notary and Land Registry fees. If the mortgage is still active at the time of the sale, there might apply a cancellation fee from your bank, depending on what was agreed at the time.
- The community certificate (certificado de la comunidad de propietarios): if your property is part of a Community of Owners, you will need a certificate issued by the president of the same, to prove that the community costs are paid up to date.
- Estate Agency fee: in Mallorca, the fees for real estate agencies are at the expense of the seller of the property and lie between 4 and 6 % of the selling price. This will come off the sale price, and you normally will not be requested to make any payment on account. The most distinguished and professional agencies, as Nova Gestio Real Estate, include the legal reviews and the administration processes in this fee.
Costs that occur after the sale of a property in Spain
- The municipal increment value tax (Plusvalía municipal): this tax is payable to the local council and it is based on the increase of the official value of the land, where your property is located, between the purchase and the sale dates. It is calculated taking into account the cadastre value and the number of years in which the property has been owned by the seller (a maximum of 20 years will be taken into account). These fees are payable within 30 calendar days after the signature of the purchase contract. They differ from municipality to municipality and can be calculated using the property tax. If it can be proved that there has been no increment in the value of the land between the purchase and the sale, a refund of this tax can be requested afterwards. It is advisable to ask a specialized lawyer or administration office about this.
- The Capital Gains Tax (Impuesto sobre la Renta de las Personas Físicas – IRPF): when selling a property in Spain, the seller will become liable to pay this tax, or, in case the seller is a non-resident, the Capital Gains Tax for Non-Residents (Impuesto sobre la Renta de No Residentes – IRNR) will be due. A property sale is declared as a capital profit (ganancia patrimonial), which means that the difference between the purchase and the selling value will be taken into account. The seller will be excluded from the payment of this tax in the following cases:
- Persons over 65 years: if the property sold was the main domicile and if all sellers were minimum 65 years old at the moment of the sale.
- Reinvestment into a primary residence: if the property sold was a main domicile and the seller reinvests the profit of the sale in a new principal residence within the following 2 years after the sale.
- Fees for an administration office, an optional expense: a tax consultant (gestoría) or an administration office can be hired by a property seller for managing the tax payments, as well as other formalities associated with the sale. Furthermore, the administration office can be helpful in achieving reductions in tax payments.
COSTS FOR BOTH THE BUYER AND THE SELLER OF A PROPERTY
Even if these costs are not directly associated with a property sale, but are due for the maintenance and the running of the property, they do need to be taken into account when selling real estate. The costs concerned are, for example, utilities, which will naturally be changed to the name of the new owner, but this can take up to 2 months. The amount to be paid by each party will be calculated taking into account the period of time that either the buyer or the seller has owned the property. Below we have listed the most common costs that apply in this case.
- Owning property tax (Impuesto sobre Bienes Inmuebles – IBI): this tax is based on the property without distinction whether the owner is a resident or not. It is calculated based on the cadastral value of the property. The payment period is set by the town hall, but in most cases this tax is due in November.
- Refuse collection (Tasa de recogida de basuras in Spanish): this is a small tax paid yearly per property, normally around 120 €. It covers drainage and refuse collection.
- Utilities: for example, electricity, water, gas, internet, etc. In Mallorca, electricity and water bills are normally due every 2 months.
- Community charges.