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A Guide to Selling your Spanish Property


Browsing through the internet sites of various real estate agencies you will be amused by the ways in which some homes are presented. It is therefore important to consider when selling your Spanish property that it is able to be presented in the best possible way. Dressing beds, removing clutter and an inviting bottle of wine or breakfast on the terrace table can all make a difference when your agent comes to take the photos that will be published to entice prospective clients to view....

Times are changing; and with the introduction of new consumer legislation here in Spain then it is important that the seller provides as much information to the agent as is required. Here the key words are sincerity and transparency – and to give confidence for your buyer - it is vital that you work with your estate agent to comply with these new laws. It is no longer a simple case of arguing over the commission rates, the promotional details and the flowery descriptions [#1]. Today, in order to be compliant with decreto 218/2005 of the regional Andalucian government, any real estate agency of worth will ask you to supply the following basic information:

Copy of passports / NIE of owner(s) plus all contact details  
Copy of IBI contribution receipt and full address of property(ies) for sale  
Copy of Community fees receipts and latest minutes (where applicable)  
Copy of the latest nota simple (no less than 3 months old) and also a copy of the Escritura (title deed)  
Copy of building regulations, plans or licenses where applicable (building consents from the town hall where the property is less than 10 years old should be available)  
Copy of last water, electricity and rubbish collection bill
Copy of Inventory (if being sold full or part-furnished)
Copy of Certificación de la Eficiencia Energética de los Edificios - EPC

From this information your agent will be able to identify the "health" of your property, and also to give a realistic market valuation [#2]. By their part the agent will then produce an information sheet (in Spanish) that can be given to any interested client prior to viewing. Supplementary information may be also worth providing if you wish to be ahead in the selling game - provide details of room sizes, descriptions, inventories (if sold furnished) and also additional assets like irrigations systems, air-con/heating, pool pump, gas boiler, alarm, solar panels, etc – and all this can be made even more attractive if the vendor supplies some basic guides to age and use. Much of this information costs nothing but only time to produce; and a serious buyer will be asking for it in any case, so why not be ahead of the game and have this information available at the start.

As of April 5 2013 the Spanish law came into place in regards with the established European norm for the introduction of Energy Performance Certificates (EPCs) - Certificación de la Eficiencia Energética de los Edificios - for all properties which are built, sold or rented. If you are currently selling your Spanish property or you are holiday home owners, then you must order an EPC for potential buyers and tenants before 1st of June 2013. After which date owners will be fined if they cannot supply the certificate; and if selling, and the completion date is from June 1 then the notary will ask that you present the certificate at the point of exchange.
The EPC will contain information about a property's energy use & typical energy costs, include proposals about how to reduce energy use & save money, and add suggestions on measures that should improve the performance of thermal installations, lighting systems, or for the incorporation of renewable energies in the building. The EPC will provide a property an energy efficiency rating from A (most efficient) to G (which represents low performance) and the documents has to be renewed every 10 years.
EPC's must be issued and stamped by legally qualified building engineers who are also registered with the college of Spanish Engineers in their region; and the cost depends on the size of the property and starts from 100 Euros.

A recent real estate report suggested that selling a property should be no different to selling a packet of frozen peas... and although we are considering an asset that is clearly a million times more expensive the product should nevertheless, without inconvenience or surprise, provide what it says on the label. Therefore if you are serious about selling be serious too with your choice of agent; take the agents advice to realise your market potential; not all properties in Spain are sold on English websites by English brokers to English people. There is the home market and the International market too to consider. Another useful tip is to do those niggling minor repairs to the property, keeping the house generally clean and tidy, and be available for on-the-spot viewings, too. This really will help to give your property the edge! And if your likely to be out of the country for some time, or not easily available, then consider giving 'power of attorney' to your lawyer or Spanish legal representative who can then act on your behalf in signing the initial private contract. This too will speed up the selling process.

Tropicana aims only to offer property that meets these latest guidelines and regulations - an assurance to the seller and buyer alike that it is a property worthy of consideration. Wherever possible we will ensure that the property offered is available to view, even at short notice, and that the agency is a key holder for the property. There is nothing worse than arranging to view a property only to find that the owner or the friend who holds the keys is - "not available"...

As a vendor you need to be aware that as of 1st January 2015 capital gains tax laws changed in Spain. Where a non-resident used to pay 35% and a resident 15% up until 2008, this rate changed in 2010 for both residents and non-residents (it had been 18% from 2008 to 2010, then to 24% to the end of 2011). Today, the rate is banded - the first 6000 Euros is taxed at 21%, gains to 24,000 Euros at 25%, and above 24,000 Euros to 27%. It may be possible to offset some costs, these include legal fees, agency commissions, registry, etc; but not costs on general improvements done to the property in order to sell. We would strongly recommend asking for clear advice from your lawyer or accountant as to your exact tax obligations given that you have 4 months to present a tax return soon after completing the exchange, the tax can be liable for up to 5 years from the sale, and further that it is not sufficient to be resident in Spain you also need to prove fiscal residence to be exempt from the retention or the full tax liability.

On the date of exchange and completion before the notary office, the non-resident seller will receive the sale price less 3%. The purchaser is required by law to hold 3% (up until 2006 the retention was 5%) of the purchase price on the sellers behalf; and so 2 payments will be presented before the notary one to the seller the other for the tax authorities (Hacienda). This system was introduced to guarantee tax payable by non-residents and the sum presented is then used to offset against future liability of declaration. Failure by the buyers to ensure payment of this retention by their lawyer or agent can mean that the amount will be levied as a debt on the property [#3].

Plusvalía is the municipal charge for the increase of the value of the land from the time of purchase to the time at which it was sold. This tax is paid for by the vendor, and if you are non-resident this amount too is usually retained from the sale price by the buyer’s agent or lawyer for settlement after the notary exchange. Plusvalía is calculated on the ratable value of the property and the number of years of ownership (the tax is not determined by the sale price but by the land value determined by the land register); and is paid to the local authority. Depending on the property size, location and length of ownership the amount can vary between a few hundred to two or three thousand Euros. While some town halls will calculate payment and issue the receipt within in days others can take several weeks or months.

Finally, make sure you have your NIE (not just an NIF) and also that your certificate of non-resident (requiring renewal every 2 years) is still current. If you are fiscal resident then you will also need to be present a certificate from the Spanish tax authority that is within 3 months of issue – the certificate is by itself valid for 6 months from the date of issue.

NOTES:

[#1] In Spain, the commission rates charged by estate agents vary quite substantially. In some areas and towns this can be shared between the vendor and buyer; where each is charged a percentage above the advertised price.
[#2] It is often forgotten that the valuation of a property for mortgage purposes is very different to that of the actual market conditions. Here in Spain it was possible, while interest rates were low, for residents to capture a larger mortgage from lenders than was actually required for the property. In this way borrowers were able to consolidate other loans for purchases (car, furnishings, etc) within one capital payment. Further mortgage valuations, in order to be attractive and competitive, will almost always be greater to one degree or the other than the actual market price.
[#3] One of the most important documents to help the vendor or the buyer identify if there is any debt on a property is the nota simple. Costing a couple of Euros, this document is available either online from the property registration website and can be purchased by credit card at - https://www.registradores.org:444/propiedad/propiedad.jsp, or by visiting the local office of the land registry in which the said property is listed. This document shows mortgage details, unpaid fines, tax debts, embargoes, and also outstanding payments due by the owner to the state when they are resident and self-employed in Spain. This same document is also used to identify the property title holder(s), their legal status, the number of times the property has been exchanged or amended, its cadaster reference (land, location and distribution for taxation) and a description in full of the property relative to its location and its neighbours. In some instances, for example an apartment with garage, then the property(ies) will have two entries in the land registry; one the apartment and the second for the garage. As a vendor it would be prudent to renew your nota simple every 3 months so as to avoid any surprise entries or omissions which may delay the exchange. This can happen in various ways; changes in the legal qualification of a property as dictated by the government, extensions built but not declared and written into the escritura, bank re-possessions, embargos and other charges against a property (for example, unpaid community fees), etc. In fact as a vendor it is in your very best interest to obtain a copy of this document both to ensure peace of mind and readily to arm your buyers' lawyer with an up to date version for inspection. Expatriate home owners and buyers are now able to request a Land Registry certificate (nota simple) in English from the Colegio de Registradores (College of Registrars). A certificate, including the translation fee, costs around €30 (plus VAT) and it can be requested online from the Colegio de Registradores website https://buyingahouse.registradores.org

Edit: 08.2017