As a property owner, what expenses do I have when selling?
The basic expenses when selling a property are;
• Capital gains
• The municipal capital gain
• Real estate agency fees (if applicable)
• The expenses of the various certificates (energy efficiency certificate, 2nd occupation license certificate, Certificate of no urban infringement, etc.)
• The expenses of possible works or improvements in the house that have not been registered (legalization of the house)
• Lawyer (if applicable)
• Notary Public (this may vary depending on which area of Spain the home is located)
• Possible expenses (notary and registry) derived from the cancellation of a mortgage
• Annual expenses (IBI, supplies, community of owners)
The capital gain derived from the sale of a property
The capital gain is the tax that we must pay in our income tax return on the gains obtained between the purchase and sale of the property.
All gains (if any) must be declared as an increase in equity. That is, it is taxed for the difference between the amount of the value of the purchase price and the sale price provided that there have been profits.
In case of not being residents in Spain, the buyer is obliged to retain and make the payment, to the state of 3% of the value of the sale in writing, in concept of possible capital gains, in its form of income tax of no non-residents.
The fees of the Real Estate Agency
Although its percentage varies depending on the location of the property, it generally ranges between 4% and 6% + VAT.
Legalization of the property
The legalization of the property is a time-consuming process and can incur higher costs.
It is a process that we must carry out either for infractions that have appeared in the urban infringement certificate or simply for having carried out works with or without permission but that have not been legalized and that the buyer requires in order to carry out the sale.
In this case, we must assess whether it is worth anticipating, since sometimes it is not so much the cost but the time we lose and it may happen that a sale is lost due to this problem.
Although it is usual in our area, all notary expenses are paid by the buyer, there are exceptions since according to law there is a part that the seller must assume.
If we abide by the current legislation, our Civil Code in its article 1455 says: “The expenses of granting deeds will be paid by the seller, and those of the first copy and the others after the sale will be paid by the buyer, except pact to the contrary “.
There are some expenses such as the IBI that by law correspond to the seller, but in each area there are different agreements.
The usual thing in our area is that all expenses are prorated (IBI, Garbage, Community of owners, supplies) on the date of the sale.
Notary and registry of debt cancellations
If the property is encumbered with any debt, the corresponding notary and registration expenses are paid by the seller.
The municipal capital gain
The Tax on the Increase in the Value of Urban Land (IIVTU) is paid to the corresponding town hall, that is, where the house is located and is paid, even if there have been no benefits.
It is calculated on the cadastral value of the home and the number of years it has been owned. If we want to know in advance the amount, we must send the last IBI receipt and the date on which the property was purchased to your manager or real estate agency.
The costs of the certificates
Energy efficiency certificate
The energy efficiency certificate is mandatory from June 1, 2013, it is a quick certificate to obtain and its cost depends on the type of property and location, although in general it does not exceed € 125 including registration fees.
The 2nd occupation license certificate (renewal of the occupancy certificate)
In territories where the second occupancy license is mandatory, it is the responsibility of the legal owner of the home to have a second occupancy license for the property and that it remains in force.
This certificate is mandatory in the Valencian community when buying and selling a property.
To obtain a second occupation license, you must contact an accredited technician, who will be an architect or surveyor, to generate a report on the status of your property.
After that, you can take that report to the town hall yourself (or sign an authorization for the technician you have hired to take) and the town hall itself will grant you the second occupation license.
Certificate of non-existence of urban infringement
The certificate of non-existence of urban infringement file is the document by which it is certified that the property does not have any open file for urban infringement. In sales transactions, many sellers decide to request the same to present to future interested parties.
It is also very common and especially if the property is a villa that the buyer’s lawyer requires this document.
This document can significantly lengthen the sale, especially if there are non-legalized work violations, etc.
It is very common that you as the owner prefer to use your own lawyer to manage your part of the sale.