Expenses in the sale of a home in Spain
Which are the expenses that I will face when selling a home in Spain? The real estate agency’s fees and the state and municipal taxes levied on the sale of a home.
Real estate agency’s fees
Usually, and in particular on the Costa del Sol, the real estate agent’s fees are borne by the seller. The commission of the real estate agency corresponds to a percentage of the sale price and may vary depending on the type of property and the place where it is located, since these factors will determine the valuation of the property.
Taxes levied on the sale of a home in Spain
If you sell a home in Spain, you will have to pay a tax on the Increase in the Value of Urban Land (Impuesto sobre el Incremento de Valor de los Terrenos de Naturaleza Urbana) or “municipal surplus” —a tax paid to the local council—, and the Patrimonial Gains Tax (Impuesto sobre Ganancias Patrimoniales), commonly known as “state surplus” or simply “surplus”, which taxes the difference between the original purchase value of the home and the sale value, and which is paid to the State.
As it would imply an increase in property, this last tax is included in the Personal Income Tax (Impuesto sobre la Renta de las Personas Físicas, IRPF) of the seller, in the event that he/she is resident in Spain, or in the Non-Residents Income Tax (Impuesto sobre la Renta de los No Residentes, IRNR), if he/she does not reside in Spain. If the sale value were lower than the original purchase value, i.e. if the overall increase in net value from the purchase and sale of the property was negative, the fee to be paid would be € 0.00. The buyer, on the other hand, will pay the so-called Tax on Transmissions and Documented Legal Acts, in its modality of Tax on Onerous Property Transmissions (link a “expenses of the purchase of a home”).
In summary, when buying a second-hand home in Spain, the taxes payable are as follows:
- The seller pays the Tax on the Increase of Value of Urban Land (or “municipal surplus”) and the Patrimonial Gains Tax (or “state surplus”).
- The buyer pays the Tax of Transmissions and Documented Legal Acts.
Next we will see more details about the taxes paid by the seller:
Tax on the Increase of Value of Urban Land (IIVTNU) or “municipal surplus”
Paid by the seller, it taxes the annual increase in the value of the land, which varies depending on the years passed (over a maximum of 20 years; only full years are considered, not fractions). In Marbella, for example, the city council establishes the taxable base of this tax according to the following scale:
Period Annual Percentage
1 to 5 years 2.5%
5 to 10 years 2.3%
10 to 15 years 2.4%
15 to 20 years 2.5%
That is, if I buy a home in Marbella and decide to sell it after 6 years, the corresponding annual increase will be 2.3%, according to the scale. The percentage that I will have to pay is: 6 x 2.3 = 13.8. The municipality considers that, during the six years passed since the purchase of the property, the value of the land has increased by 13.8%.
The taxable base of the tax is, logically, the value of the land at the time when I made the purchase of the property. If the value of the land at that time was, say, 50,000 €, the amount to pay would be 13.8% of 50,000, or 6,900 €.
Patrimonial Gains Tax (“Impuesto sobre Ganancias Patrimoniales”) or “state surplus”
As we have pointed out, this state tax, paid by the seller, taxes the difference between the original purchase price of the property and the sale price. By sale price we mean the amount resulting after deducting from the value of the deed the amount of the Tax on the Increase of Value of Urban Land (IIVTNU), which we saw in the previous section, and the commission paid to the real estate agency with its corresponding VAT. The taxable base of this tax, i.e. the sale value, would be established as follows:
Sale value = Deed value – IIVTNU – (R. E. Agency comission + VAT)
Which, then, is the amount imposed on this taxable base? The amount to be paid is established according to the following scale:
- The first € 6,000: 19% is deducted.
- From € 6,000 to € 50,000: 21% is deducted.
- From € 50,000 upwards: 23% is deducted.
This tax will be applied within the Personal Income Tax (“Impuesto sobre la Renta de las Personas Físicas, IRPF”) to be paid by the seller in the year following the sale (the IRPF is a state tax paid annually), in case the latter is resident in Spain, or in the Income Tax of Non-Residents (“Impuesto sobre la Renta de los No Residentes, IRNR”), in case you do not reside in Spain.
There are some exceptions to this rule: thus, those over 65 who sell their usual home for up to € 350,000 and invest the money in the purchase of another regular home will be exempt from tax for this “surplus value”.
Since January 2013, it is mandatory to provide proof of payment of this tax as a requirement to register the sale in the Property Registry.
Important notice about the costs of selling a home in Marbella or anywhere else in Spain: All laws and regulations are subject to change. The information contained in this section has been collected as a guideline for potential sellers of real estate in Spain, without implying any contractual obligation.