September 6, 2006 at 12:59 pm #52209
We are considering selling our property in Spain and I wonder if anyone could advise us of the costs involved (apart from agent fees!) in selling and also the timescale once a buyer has been found. We are non-resident in Spain.
September 6, 2006 at 3:45 pm #65533
The main costs involved are capital gains tax and plus valia – which is the increase in value of the property between time bought and time sold. This depends on a number of factors – the timescales involved, the town hall itself, the increase in value and if the classification has changed (ie you bought it as a ruin – number 9 on the cadastral – and is now a luxury dwelling – number 1)
This is difficult to calculate unless you know the town hall and even then it is not that easy.
As for capital gains tax. As a non resident you are liable currently to pay 35% of the profit made on the property – this is due to change next year I believe to 17% for non residents but I am sure someone will correct me if I am wrong. However the buyer has a legal duty to retain 5% of the purchase price against these capital gains taxes. In order to claim it back you have to submit a Declaracion de rentabilidad, which includes the price bought at, price sold and any money spent on it (with VAT receipts)
If the hacienda decide the difference is less than the 5% retained then you will get this back – if not then you will have to pay the difference. A lot of foreigners just leave it at the 5% retention
As for how long it will take to sell. This depends on a lot of factors – where is the property located, if it is in a popular area and well priced it should sell within 3 months, if not then it could be a lot longer. You may be lucky and find someone wanting it the first day – my sister put hers on the market last week and an agent came round on Thursday, brought a buyer round Friday and she paid the deposit Saturday.
Whereas there are many properties locally where the owners want way too much and they are wondering why the house is not even attracting visitors.
I recently wrote an article regarding this subject – although it is about the Valencia region and Oliva area specifically the ideas are the same (also suggests ways of improving your chances of selling and a rough formula for valuing a house – but this is based on local figures)
Hope this helps
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