House sale costs

[alcanadakid]

Could someone please give me an idea of the costs of selling a house in Mallorca?

Estate agents fees percentage?
Capital gains tax? (19%?)
Other taxes?
Retentions?
Anything else?

Many thanks

 

[bobley]

The estate agents fees are about 4%. You'll need to get your energy efficiency certificate done and probably a habitation certificate too. Dunno what a vendors solicitors would charge. I'm sure it's less work to sell than buy so maybe €2k??

 

[Deanscroft]

Estate agents fees are 4-5% + vat which is absolutely scandalous however at least here, when selling, if you have an estate agent you don't need a solicitor which saves 1% + vat.
Capital Gains Tax is what is says. A tax on the profit made so is paid on the difference between the price you paid for the property + all fees paid and the sale price less all fees paid. In addition if you have receipts for any refurbishment work these can be taken off the profit. Also, if it is your primary residence and you are reinvesting the full amount in another property you don't pay CGT. Also if you are over 65 and have owned the property for at least 3 years (I think?) there is no CGT.
If you are not a resident 5% of the sale price will be retained to settle any outstanding bills. In theory you can apply for this back after a year but in practice nobody bothers because the costs of doing so usually cancels out anything due back.
Plus Valor tax is due on the increased value of the plot and is calculated by the Local Council. For non-residents this is part of the retained 5%. I think for residents it has to be declared on the next years tax return.
I'm sure there must be something else but it doesn't spring to mind at the moment.

 

[Millipet]

Deanscroft. House selling costs.
Where did you get the information about no CGT to pay if the owner is over 65 and has owned property for at least three years? We have been looking into the prospect of selling or transferring ownership to family members and the costs really add up to unbelievable figures. Would be interested to have additional information about all this.

 

[Deanscroft]

It all comes down to whether you are a resident and registered to pay taxes in Spain. If not I think I am right to say you will pay 19% fixed rate.

 

[Rockape]

a quick google search brings these seller costs updated last week:

Agency commission
(between 3%-6%)
Capital gains tax
(variable 19%,21%,23% for 2018)
Income Tax Provision (Retención)
(3% non-residents only)
Energy certificate
(between 100-500 euros)

When you sell a property through an estate agent you will have to pay a commission fee. Estate agents usually charge around 5% commission in Spain. The seller can deduct the Agency commission fee from his capitals gains tax.

Capital gains tax for 2018 → Seller
19% for the first 6.000 euros
21% from 6.000 and 50.000 euros
23% from 50.000 onwards

If the seller is not a Spanish resident he has to pay 3% income tax provision or retención in Spanish which goes directly to the tax office to cover any taxes resulting from the sale. However, the seller can claim for a refund if he believes that his tax liability is less than 3%.

The plusvalía is a tax over the increase of the value of the ground the property is on. This is paid to the local town hall. The plusvalía is calculated on the basis of 3 factors: The period of ownership, the location of the property and the cadastral ground value.
The plusvalía tax can easily be requested at the town hall where the property is located.
By law, the plusvalía tax should be paid by the seller and it can be a substantial sum of money. Nevertheless, the plusvalía can be paid by the buyer if he has agreed to it.

Here is a basic example giving some rough estimates of the costs:

Mr. A (the seller) sold his apartment in Mallorca to Mr. B (the buyer). When Mr. A bought the apartment in 2003 he paid 200.000 euros. Now Mr. A has managed to sell the apartment in 2018 to Mr. B for 350.000 euros.


Costs for the seller (Mr. A)

Sold it in 2018 350.000
Bought it 2003 - 200.000
Profit before taxes 150.000
Capital gains - 33.260
Agency fee 5% - 17.500
Income Tax Provision 3% - 10.500
Plusvalía tax - 4.000
Energy certificate - 300
Net profit 84.440

So in other words good luck trying to make any money!

 

[Rockape]

saw this Q & A which seems relevant:

Q: » I purchased o house in 1997 and I'm thinking of selling. Because of the long ownership the selling cost is much greater than the purchase price I paid. Will I have to pay the full CGT. The property is in the Malaga district.


A: » You would probably need to pay a lot of plusvalía tax, besides the CGT. 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 1997, since you can deduct all these costs from your CGT. There is, of course, the exception I mentioned in this article " There are exceptions when the seller does not have to pay capital gains tax and that is when the sellers of the property are older than 65 and have lived there officially for at least the last 3 years.". I do not understand your statement that the selling costs are greater than the purchase price.
Property prices in 1997 in Málaga were much lower compared to nowadays, so you should be able to make a good profit even after paying CGT, plusvalía, solicitors, agency commission, etc... Anyway, you should ask a gestoría (Spanish bookkeeper) or your solicitors to have them calculate your net profit. 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 reduce your CGT, you could also sell your house furnished, since furniture is taxed at a much lower rate, I think only 4%. To do that you would have to make an inventory list. So if you sell it for 800.000 euros you can allocate 50.000 euros as part of the furniture for example.

 

[alcanadakid]

Thanks everyone. Does anyone know how to calculate plusvalia?

Do estate agents have a sliding scale dependent on the sale price?

 

[Deanscroft]

Plus Valia is calculated by the local council. We sold an apartment in January and submitted the paperwork given to us by the Notary to the Pollenca Office in the town. We are still waiting to hear back.

 

[JPALCOVER]

information about no CGT to pay if the owner is over 65 and has owned property for at least three years?

Provided the proceeds of the sale are reinvested in a Spanish pension fund, the revenues of which will be taxed in Spain (if my memory fails me not).