CONVEYANCING: TAX RESIDENT IN SPAIN SELLING A PROPERTY

Last week we were checking about the process for a Non Resident tax payer of selling the property owned in Spain, and today we will be checking the case of a Spanish tax payer seling a property.

The main tax involved will be the capital gains tax to be declared in the Annual Income tax. First of all, it is needed to know (in a similar way as it was happening for the Non Resident case) if there was any gain or  loss.  And for doing this we need to compare the updated acquisition price with the selling price.

As in this case there is not going to be an amount to get retained by the buyer as advanced payment of Income Tax, the seller will be filling up his tax form by his own when moment arrives, declaring the tax calculated in case of a gain or declaring the loss in case any profit is obtained in the deal.

The tax rates to be applied on the capital gains will depend on the amount of the gain as it starts in 21% going up to 27%.

The selling of the usual living house by a tax payer older than 65 years old (or other special cases) will not be taxed.

Also there are cases when the taxation will not be made effective if there is a reinvestment in another usual living house and if this is being done within the deadline for this benefit. Also the taxation law has been changed to the capital gains obtained in less than a year time period.

Apart from this, there are no major changes from the process followed by a Non Resident tax payer we posted recently.

We should bear in mind, in case the property being sold is located in Spain, about the local tax known as PLUSVALIA to get paid to the townhall of the city where the property is located. When a person is selling a property, this tax has to be paid to the town hall as is calculated over the increased value on the part of the land that your home is "occupying". In case of properties located in other countries, similar local taxes can be involved.

If you are selling your house through a real estate agent, you should consider also their commissions’ fees for putting the house in the market and finding a buyer. 

The seller is obliged to provide the other part with some legal paperwork as the occupation license or the recent energy efficiency certificate as European law rules.

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