It is essential for a seller to ensure that all local taxes and rates and utility bills are up to date and settled up to the time of signing the deed of sale (escritura). The Estate Agent and / or lawyer representing the buyer will require proof of this. The seller is also required to pay Plusvalia Tax based on the increase of the value of the land from the date the property was acquired to the time of sale. The tax is calculated according to the ratable value of the property and the number of years it has been owned by the seller. The Plusvalia figure can be obtained from the local Town hall Office. Notary Fees are normally shared equally by the buyer and seller.
Capital Gains Tax (CGT) - This is approximately 20% of any gain made between the purchase price and the sale price. For non residents it is usual for a 3% withholding tax to be deducted from the sale proceeds at the time of signing the deed of sale (escritura). Within six months of the sale a non resident has a legal obligation to complete and submit a non resident tax return reflecting the sale details and any other relevant items regarding tax allowances, based on personal circumstances, that may affect the final CGT due or CGT refund.
Please note that this information is meant as a guide only, local laws and figures can change from time to time. In all circumstances we recommend that you take professional local advice regarding your personal situation.