Ten easy steps to sell property in Spain

Property for sale in Malaga, Spain idealista

3 July 2024, 9:00

Today’s article mirrors last month’s Ten easy steps to buy property in Spain.

The following article aims to be a basic checklist covering what I reckon are the ten basic points, nothing more.

On selling, you need to pay two taxes: Capital Gains Tax and Plusvalia Tax.

I’ve divided the article into 5 points pre-completion, and a further 5 points post-completion.

As a word of caution, never hand over the house keys before completion (at the notary). Explained in our idealista article.

Pre-completion

Hire a lawyer

Hiring an independent lawyer is the best advice I can give you. If you are a non-resident in Spain (particularly a foreigner), you are strongly advised to instruct a lawyer to assist you through the conveyance procedure. Your appointed lawyer can do all the following, and more:

Line up all the required documents
Avoid payment scams
Avoid abusive sales commissions
File a 3% tax rebate
If selling at a loss, filing a tax rebate on the Plusvalia Tax
Dealing with other lawyers, tax office, agents, notary, community of owners, town hall, etc.
Dealing with utility companies (water, electricity, gas, landline, etc)
Discharging a pre-existing mortgage on the property
(Greatly) mitigate the seller’s Capital Gains Tax liability (on average reduce it by 70% or more)
Negate the CGT on reinvesting the sales proceeds on a new main home (even outside the EU i.e. in the United Kingdom).
Etc.

Lawyer’s fees are 100% tax-deductible on selling your property in Spain.

Hire an estate agent

Estate agents in Spain, for the most part, remain unregulated. This means that anyone can be an agent, but only a handful stand the test of time

A good estate agent is invaluable and helps to fetch a fair sales price in a short span of time (months). Bad agents are passive, and your house will be on sale for years.

On selling, you need to list your property with a real estate platform such as IDEALISTA (Spain’s number one online property platform) or with one, or more, agents. Be mindful of giving an agency exclusivity on your property unless you are sure of what you are doing.

Hallmarks of reputable agencies:

The estate agency has been around for a long time (decades)
Ask around for referrals from people you trust
Member of RICS, which works to (high) British standards
Member of LPA (Leading Property Agents), or similar
Do not trust estate agencies that flaunt shady ’real estate awards’. I get three of these ‘awards’ in my inbox every week in exchange for money.

Price to sell

It’s of critical importance a seller adjusts the asking price to match market expectations.

I understand - and it is perfectly human - that owners have a tendency towards overpricing their property, all the while overlooking its flaws. However, if you want your property sold, within a reasonable timeframe (3 months), you must pick an asking price that matches a realistic valuation. Otherwise, you can be waiting for years on end until the property is sold. It is not uncommon to hear people have waited over a decade to sell in Spain (because they did not price the property correctly).

In my professional experience, properties that have been on the market for too long (6 months plus) become a stale listing which acts as poison; would-be buyers start wondering if there is something wrong with the property which drives the sales price in a downward spiral. Unrealistic pricing leads to long sales times.

Remember, be smart, price to sell.

Tax compliance

It is strongly advisable that sellers are up to date with their tax and maintenance expenses.

Buyers, on running a due diligence on the title, will get a bad impression when a seller has fallen in arrears. Moreover, in some cases, this may even jeopardise your house sale i.e. when a buyer needs a mortgage loan to complete (lenders do not borrow against properties with debts)

Documents to sell

As mentioned in the first point above, your lawyer can (greatly) assist you in collating all the necessary paperwork to sell. The following is not an exhaustive list:

Full scanned copy of your title deed
Copies of your national ID, passports, NIE numbers
Copy of recent utility invoices
Copy of IBI tax invoices
Copy of Refuse Charge (Basura, in Spanish)
Energy Performance Certificate
Licence of First Occupation
Scanned copies of the minutes of the last three General Assemblies
Community of Owner’s Certificate stating the property being sold is not in arrears
Spanish fiscal residency certificate (to avoid a 3% retention on the sales proceeds)
Etc.

Post-completion

Capital Gains Tax mitigation

Again, your lawyer will assist you in collecting all the necessary paperwork to bring down your CGT liability on selling, within the law. Your lawyer can reduce your tax bill by 70%, or more. This is explained in detail our idealista article.

File a 3% tax rebate

As mentioned in my first point above, your lawyer can file a tax rebate on your behalf on all, or part, of the 3% withheld from the sales proceeds (if you are a non-resident seller). This is explained in our idealista article.

File a Plusvalia Tax rebate

If you are selling at a loss, you can file a tax rebate on the Plusvalia Tax you’ve paid.

Serve legal notice to your community on the house sale

Your lawyer can notify them on your behalf. The reason on why this is necessary is so that all the new invoices they raise are against the buyer, not against you. This ringfences your liability.

Close your Spanish bank account

Your lawyer can advise you on this. If you close your account too early, you will jeopardize all the tax rebates from the Spanish Tax Office (meaning you lose all your tax money!).

Conclusion

If you plan to sell property in Spain, and are a non-resident, contact us to assist you in the legal procedure. We act nationwide.

At LNA we make it all easy, so you just have to sit back and relax. We take care of everything removing all the associated stress.

Not to mention our fees are 100% tax-deductible on selling!

Contact us at LNA (calling either our UK or Spain landline) and one of our friendly staff will chat with you. 21 years of experience at your service.

Related services available from LNA:

At Larrain Nesbitt Abogados (LNA) we have over 21 years of experience specialising in immigration & residency visas. We also assist clients in buying, selling, or renting properties in Spain. You can contact us by e-mail at info@larrainnesbitt.com, by telephone at our UK line (+44) 0754 3838 218 or Spanish line (+34) 952 19 22 88, or by completing our contact form.

Please note the information provided in this article is of general interest only and is not to be construed or intended as substitute for professional legal advice. This article may be posted freely in websites or other social media so long as the author is duly credited. Plagiarising, whether in whole or in part, this article without crediting the author may result in criminal prosecution. Ní neart go cur le chéile. VOV.