Selling – Cost and Taxes

Costs and taxes related to selling a property in Ibiza

There are various costs and taxes over and above the initial property price that sellers in Spain must receive when selling a property. y’s purchase price, including taxes and obligatory additional charges. These costs are broken down below as follows:

Withholding of 3% of the price

Obtaining a gain through the sale of a property in Ibiza is considered as taxable income. The gain is determined by the difference between the sale value and the acquisition value.
When the seller is a natural or legal person that is not resident in Spain, the acquirer is under obligation to withhold a percentage of the purchase price, a percentage which is set by law and at this moment in time is fixed at 3%, and the acquirer must pay this sum to the Spanish Treasury within a maximum period of one month, by way of a down-payment for any possible increase in the seller’s equity.

When a loss of equity is produced or when the amount of the withholding is greater than the amount the seller must pay in Capital Gain Tax, a refund can be requested by submitting a specific form for this purpose to the Spanish Tax Office.

If the Spanish Tax Authorities do not challenge the values recorded in the statement or open an inspection, the withheld amounts (or those paid in excess) will be paid back in a period of approximately ten months as from the date of sale.

Nevertheless, for the Tax Authorities to authorise a refund, the tax payers must have submitted their annual income returns as a non-resident and be up-to-date with all payments.

Plusvalía Tax
This is a municipal tax that is calculated on the basis of the increase in value of the land on which the property is located. The law holds that the Plusvalía Tax must be paid by the seller. The factors determining its amount will vary from one Town Hall to another, but they mainly come to the location and surface area of the plot of land, the percentage of mutual share and the years that have passed since the last conveyance.

Lawyers’ fees
In general, they come up to 0.5 to 1.5% of the sale price, plus current VAT. These fees must be agreed at the start of the contractual relationship and not increase throughout that relationship, except where the initial assignment undergoes considerable modifications at the client’s express request. The lawyer’s professional fees are an expense that can be deducted when calculating the Capital Gain Tax associated with the sale.

Estate agents’ fees
This usually is 5 % of the sale price, plus VAT at the current rate of 21%. The estate agent’s commission is paid by the seller when the deed is signed, once the total sale price has been received. This cost can also be deducted when calculating the taxable Capital Gain.

Capital Gain Tax
Capital gains tax in Spain. Spain’s capital gains tax (the tax paid on profits from selling property or other investments) is 19% for people living in the EU.

Energy performance certificate
In compliance with European directives on energy and environmental issues, the owners of existing homes must provide potential buyers with the property’s energy performance certificate, which must be issued by a qualified technician.