And of course it can happen that you decide to sell your house in Spain!
Maybe you are tired of Spain, you have been here a couple of years and just want to leave..
Or maybe you want to buy something else, bigger and nicer, in another area, or on the other hand smaller and easier to clean and maintain…
Whatever the reason you have to sell the property, the procedure and the way to handle things basically are the same.
We’ll just now suppose you have a buyer, and we’ll only deal here with the legal and financial side of the issue. In this case we have to know whether or not you are a resident in Spain.
In case you are not a resident in Spain the purchaser will have to retain 3% of the sales price. He will have to pay this amount into the tax office, on account of your CAPITAL GAINS TAX. After that you will have to present a proper tax return stating the real benefit you have made. This benefit is calculated on the sales price less the original purchase price (including any costs you have had at the moment of purchase and also including any building you have done after the original purchase).
On this benefit finally you have to pay 19% income tax. The 3% the purchaser has retained was on account of this tax and will be deducted. Of course it is possible that the 3% retained and paid into the tax office is more than the 19% on the real benefit. In this case the tax office will return you the difference. Also it is possible you have made no benefit at all. Also in this last case you will get the 3% back from the tax office.
And if you are a resident?
That changes the whole story. Also here it is important to know how long you have been a resident in Spain and how long you have lived in the house you are selling. If you are more than 65 years old and you have lived there more than 3 years, you DO NOT PAY ANY CAPITAL GAINS TAX on the sale of the property. In the other case, if you are under 65 years old and/or have not lived there more than 3 years, the capital gains has to be included in your normal tax return. Also in this case you pay 19% on the benefit, calculated on the sales price less the original purchase price (including any costs you have had at the moment of purchase and also including any building you have done anter the original purchase). Also there is a possibility of tax relief in case of reinvestment in another real estate property.
Many people confuse the “plusvalia tax” with the “benefit gains tax”. We are talking here about a completely different tax. The plus valia tax is a local tax to be paid at the moment of the sale of your property on the rise in the value of the plot where your house is located. The value used by the town hall to calculate this tax is the Kadastervalue (valor catastral) which you can find in your IBI (local rates) receipt.
And of course we would always recommend you to contact a professional real estate agency to sell your property.