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You might only be able to deduct half of that if you are planning to reinvest by buying another property that is half the value of your sold property. When you sell your house in Spain you will have to pay your taxes in Spain and next year you will have to do your income tax declaration in Spain. You can transfer the money to your bank account in the UK, but for the tax declaration, you will have to declare your UK bank account.
When transferring the money to the UK it is also a good idea to see what exchange rate your bank is charging, it is sometimes a smart move to use a currency broker to transfer your funds to the UK since that can also save you thousands of pounds. Just a quick reply to your question. In Spain when you buy a house it is wysiwyg what you see is what you get.
The airconditioning is not even part of the physical structure of the house and it is not possible to claim form any damages. Only in some extreme cases would the buyer be able to claim for structural construction damages, eg: buildings affected by aluminosis the degeneration of cement used in construction. Rest assured that they will also not spend money on a solicitor for euros and it is only a scare tactic. So the best thing you can do is ignore it. I know it is outrageous what some agents charge.
There even are agents that charge commission from both buyer and seller. The problem is that the profession of estate agent is not regulated in Spain and everybody with as little as a mobile phone can call himself estate agent. However, many agents do a good job, but because of the fierce competition in the field and the long time it takes to sell a house in Spain on average 10 months agents are sometimes forced to charge these high commissions to prevent going out of business.
Nevertheless, it feels indeed very injust compared to the fees in the UK. On the positive side a proper agent will give you an invoice for selling your property, which you can use to deduct from your capital gains tax, but in your specific case, you do not have to pay CGT since you already meet the exception criteria.
There is, however, a growing group of agents that sell property for a fixed fee, which might be of your interest. I have gathered a list of these on-line agents in Spain. When buying a new home, it very much depends on your situation and the region in Spain you are going to buy in. Hopefully, you both have your primary residence set in Spain for more than 3 years, since then you would be exempted from paying capital gains tax. When buying another property in Spain, you will have to pay your regular buying taxes as explained in this article.
Just to make sure ask the buyers solicitor if its for that. Otherwise, I see no reason why you should pay anything else. All other taxes are the same for both residents and non-residents. The period to be eligible for the GCT exception is 3 years at the minimum. My advice would be to gather all official invoices you have incurred for home improvements, solicitors costs etc and even the costs and invoices form your purchase in , since you can deduct all these costs from your CGT.
I do not understand your statement that the selling costs are greater than the purchase price. In the old days more than 5 years ago it was a common practice to buy a property with big sums of B money to avoid paying extra taxes.
Nowadays, it is almost impossible to do that since the tax office will make their calculations and buyers and sellers can get fined for selling at a low price. To do that you would have to make an inventory list. So if you sell it for It can be the case that an agent does not have many properties to offer a client and therefore might look for other partners or collaborating agents to offer the client more properties to choose from.
That is normal, and in these specific cases both agents will split the commission 2. It seems the agent you contacted is trying to profit from buyer and seller, and I would have serious doubts to trust such an agent. If the price in the deeds of your apartment when you bought it in is higher than the price you are selling it for now, then, in theory, you should not have to pay any capital gains tax.
I say in theory because the Spanish tax office also has to believe that you are selling it for a lower price, otherwise, you can expect to receive a fine, but hopefully, I hope that does not happen.
The thing is that you bought the apartment during the crisis and since then Spanish property prices have gone up, but the tax office sees that differently. The tax office calculates the value of your apartment and takes many things into consideration. The walls are also taken to increase the m2 surface as well as a small percentage of communal grounds, such as pools, gardens, etc… There is no guarantee that if you appeal against the tax office you will get your euros back.
Anyway, you need to prove that your apartment was sold for the actual selling price at the time you bought it. Bear in mind that a solicitor will also cost you money, probably in the region of euros. If you decide to appeal, the tax office will inspect the sale and any other sales on that complex and there might be that some apartments were sold or have been sold for If that is not the case you have a good chance getting of your money back.
So you have to calculate that on top. For example: Selling price It is indeed very frustrating that the Spanish tax office takes a very long time to pay out refunds. I know firsthand that in some cases it takes up to 3 years and more. Many foreign sellers just forget about it and close their Spanish back account and that money stays in the tax office. The frustrating part is that in most cases it is not worth it going to a solicitor for this since it is not more than 5.
Important: If you closed your Spanish bank account you need to give a power of attorney to your solicitor so that they can reclaim the money back for you. So only you are eligible for this exception in this specific scenario. For your wife to avoid paying CGT a smart thing can also be to reinvest the profit by purchasing another property in Spain.
For example, buying a smaller or cheaper property. By reinvesting your profit you are also exempt from paying CGT. Hope that helps. Kind regards Robbert. Share this Article. We sold our house feb which we had lived in over 15 years. We do not like living in the apartment and want to sell. Purchase price selling price maybe euro we know we may have some capital gains to pay.
My question if we buy a static caravan on Residential Park Site near Antequera euro monthly community fee euro. Will this be classed as buying another home avoiding the retention fee. Regards Trevor Dear Trevor, We are not totally sure we understand your question about the retention. Greetings from Malaga, I am 69 and my wife is 55 years old and we both are Spanish residents. We lived in our house for 22 years and we are now selling our house.
Am I exempt from paying capital gains tax for only half the selling value and responsible for paying tax on the other half because my wife is not 65 yet? Thanks in advance. Is this correct? We are non-residents in Spain. Thank you in advance. I overheard someone talking about a new rule in Spain which is that the bank now is the one paying notary fees and other costs when buying a property in the country.
Is that really true? We are in the process of purchasing a property in Spain. We have paid the deposit and everything appears to be going through. We are living in England and paying the price in pounds to an English Bank as the sellers are English. We agreed on on a price at euro rate to the pound some months ago, but this has now fallen. However, we have just been sent a list of legal retentions that must be paid by the sellers.
However, this long list -Spanish capital gains, plusvalia, estate agent pending fees, pool declaration costs is being added up and converted from euros to pounds and we are expected to deduct this off the sellers selling price for the property and transfer the money to Spain in euros.
The fall in the pound, plus transfer fees is going to cost us a lot of extra money. Is this right? Your guidance on this would be helpful The exchange rate should be the rate on the day of the purchase to avoid further discussions about this. It was left in a will. The solicitor told us it was sold but now we cant get in contact with him.
We have tried calling, emailing, WhatsApp but no response. What should we do next? How long does it take for seller to receive money after completion of sale? Hello, We bought a villa in We paid showing clearly on our escritura Euros , and Plus Valia Euros 60, So we actually paid euros , approximately. Now in we are selling at gross euros , Please — will capital gains profit tax be levied on us at , or ,?
Namely, our cost for current tax liability purposes was K or K? At the time of signing, how does it work that we would have already paid off Do we just agree between seller and buyer that the house is being bought for Also, am I correct in assuming the buyer pays no estate agent fees? Hi, We live in Mallorca in a house purchased by my husband 11 years ago. He is non-resident, works overseas for more than 6 months of the year.
This is our main home. What tax implications when selling? Thank you You would have to pay quite a lot of Capital Gains tax since you made quite a lot of profit. I am a resident of the USA and live in California.
My mother who was born and raised in Spain passed away recently. In her will, she transferred ownership of a piece of property she owned to my brothers and I. We are now on title for the property and we want to sell it to a family member in Spain or list it on the open market we want to do this remotely and not have to come up to Spain for this transaction.
We want to understand what the market value is for the property so we think the best way forward is to get a fair market value opinion from 2 to 3 agents who work in that part of Spain. Once we have a number for the fair market value we can then discuss a purchase price with our cousin or we may decide to list it on the open market.
What is the best way to start this process? And do you think we need more than one opinion from a real estate agent as to what the fair market value is? If we decide to sell to our family member we will, of course, save quite a bit on the commissions so if we decide to go that route I am assuming that all we would need is an attorney to help with the transaction? We bought a property for k euros in and are now selling at 85k! So we will have to pay a large amount even though we have lost money!
Is there anything we can do about this? We believe the lady went to prison! Thanks, Sandy Sadly enough you cannot undo what the selling amount is in the escritura of , since you signed for it by power of attorney.
Are there any other options for her? Hi there, in your article you do not mention that the buyer also has to pay Estate agency fee.
Would you be able to explain in what areas of Spain they follow similar practice? Thank you Charging the buyer is not a common practice in Spain and many foreign buyers are led to believe otherwise.
The estate agent was Derryl from Undiscovered Spain and her partner Diego. I have asked for paperwork but have received nothing so far and they are becoming elusive, what can I do?
Is there a law that ensures I should have a copy of all paperwork? Presumably, this is to avoid those astronomical fees. If you are happy to advertise and show people around yourself, and surely your solicitor would deal with the invoices for CGT calculations anyway? Thank you. Dear Robert, Thank you for your excellent answers. Now we have a question. We are thinking of selling our apartment in Malaga province.
We bought the property in for approx euros and the selling price is now We want to buy a property in Torremolinos reinvest for the same amount. However, if we have to pay CGT it means we can only afford to buy a property of approx euro.
Is there anything we can do to be exempt from the CGT Our situation Sole owner — a permanent address in DK Owner since non-resident living in Spain for just under 6 months a year. Chronic health issues improved by Spanish weather conditions. We own our own property which we completed the purchase on the 2nd July for , We are selling the apartment for , We will then be investing all the funds into a property in the UK although it may not be straight away as we need to find something.
Please could you advise if we would need to pay Capital Gains Tax and how it works. On our calculations it would be about 10 grand which we would not be lost should we not be able to get it back knowing Spain! If this is the case I suppose it would be better to wait until after 2nd July to sell? Your advice on this matter would be greatly appreciated. I should mention we are tax residents.
I would like to sell my house in Tenerife, It was bought by my mother in for 6 million pesetas, and we lived there as a family until her death in when I inherited the house. The deeds were changed over to my name and the property was valued at This then gives the new total value to be I will certainly buy a new property, but would probably only invest half of the sale amount, and may possibly not live in it for over three years.
Any help would be appreciated. We are both well over 65 and wish to sell our villa which we have lived in for 12years, and return to UK to buy a property to live in would there be any problem transferring to money to UK When you sell your house in Spain you will have to pay your taxes in Spain and next year you will have to do your income tax declaration in Spain. Hi, is it legal for a buyer to claim for maintenance costs after the sale has completed?
We sold a property in Spain last September, the buyers had a walk through to see how everything worked five days before completion and at the time I showed them how the aircon worked and it was working fine.
One thing that has stunned us is the estate agency fees, compared to the UK which I know for a fact are very very low, mainly because of online sales, our eldest son works in this field but even so have never been at the rates that are charged here, how do they get away with it, it is not as if you get shiny posh brochures these days, everything is online, there can be no justification for this, so my next question is Can you report these high fees to an ombudsman, or do we just suck it up like zillions of others, if I was younger and more computer literate I would do it my self, but alas like most of us because of the hassle and language factor must put ourselves at the mercy of the rip off merchants.
Within 10 days of signing the reservation agreement, the full private purchase contract contrato de arras is signed between the buyer and the seller. This is similar to exchanging contracts in the UK buying process. Within this time your lawyer should complete all the searches on the property - confirming that the seller own the property being sold, there are no mortgages or charges and that planning consents are in order.
Once both parties sign the main contract, it is binding. The arras contract or full private contract will usually require a 10 to 20 per cent deposit to be paid. The buyer is then committed to pay the balance of the price, and the seller once the money has been paid must transfer ownership to the buyer. If the seller pulls out of the transaction he must return double the amount of the deposit received by way of compensation.
If the buyer pulls out he will lose the deposit paid. This will happen at their office and be accompanied by the agreed final payment and all the relevant purchase taxes. The Escritura is then presented by the Notary to the Land Registry for registration and the property is passed to the new owner.
Final registation of the title deed can take several months. With a new-build property, obviously completion can take a lot longer, and the payments are split over stages of the build process, and the developer should provide bank guarantees against each payment. This protects your payments in the event the developer fails to complete the property or goes bust.
Finally, make sure that you have insurance for your property, ensure all service contracts are in your name telephone, water, electrics etc. Just as in the UK, you can authorise someone normally your lawyer to act on your behalf with regard to your legal matters in Spain. This is often wise, as travelling to Spain to sign documents can become inconvenient or mean that you miss an essential signing date through ill-health or travel disruption.
A Power of Attorney can be either general or limited to a specific function for example, the signing on your behalf of the escritura Deeds to your intended property.
So, apply for this as soon as you start looking for a property. Currently, you must apply for your NIE number in person although the rules on this tend to change from time to time; your estate agent or lawyer, who should help you.
You can purchase Spanish property very quickly, if you are a cash buyer and you have an NIE number. Certainly, it is not unknown for the Spanish in particular to see a property and be the owner with full access later on the following day. However, this is not the way to proceed for any foreign buyer and you should never rush to buy — or be rushed.
Rather, you must always allow your lawyer and building surveyor ample time to do their proper investigations. A good estate agent will help you in your search for a property but it is important to remember that just like in the UK, they represent the seller.
You need your own representation in the form of an independent lawyer that you choose. Needless to say there are many estate agents operating in Spain, of all nationalities, with British agents or agents with English language ability common in most coastal areas. So, finding an agent with whom you can communicate is rarely a problem. But finding a good one is key to your success. Throughout many areas of Spain registration of an agent is not compulsory and, even in the areas in which it is obligatory, the industry is considered unreliable.
Does the agent belong to a professional association such as the AIPP aipp. Under no circumstances should you ever sign any document from an agent without your lawyer present or having reviewed it first.
So what should you expect of your agent? They should be proactive, know the local market thoroughly and be prepared to spend extra time with you offering all sorts of general advice and assistance. Anyone who takes ages to get back to you on your first inquiry does not bode well for the search ahead.
Estate agency commissions vary widely across Spain but tend to be high as the agent does do a lot more for the overseas buyer than a typical UK agent. In general, it's common for sellers to pay an agent commission, but this percentage can vary depending on where you're looking to purchase.
Once you have narrowed down the area within which you want to buy, you should find a lawyer who can act for you. This is a vitally important move, with the services of an excellent lawyer critical to the success of any purchase of a fully legal, sound, Spanish property, devoid of any potential liabilities. Furthermore, always insist that all advice from your lawyer is put in writing, something that many Spanish lawyers are reluctant to do.
This concentrates the mind of any lawyer and helps to ensure a higher standard of professionalism.