Frequently asked questions by Costa del Sol property owners and vendors
Our homes are our most valuable and cherished assets and we believe that working with a real estate agency should be straightforward and easy, and vendors should never feel unsure about how we approach the sale of their property.
This is why we have created this frequently asked questions section, handled by our vendor services team, regarding the different stages of selling a home. It’s designed to help you learn more about the process of selling a property on the Costa del Sol, including popular areas like Benahavís, Estepona and Marbella.
We´ve done our best to help answer common questions that we´re asked by our vendors to give more insight into how the selling process on the Costa del Sol works.
We have also included Pro Tips to help property owners improve their experience when selling their home. If you have any other type of enquiry, fill in our contact form and let us know.
FAQs by vendors on listing a property on the Costa del Sol:
Yes, our local property expert will visit your home to provide you with a free valuation, and be on hand to answer any of your questions. There is no obligation to use Sur Estates once your property is valued.
Feel free to contact us to obtain a free valuation of your home today!
No, vendors do not incur in any marketing costs. When selling a property through Sur Estates, we offer different marketing packages and selling strategies depending on whether you list the property with us as an open listing or sole agency, but we take care of all marketing costs. Feel free to contact us for more information.
Pro Tip: Avoid dealing with any real estate agency that requests upfront fees for advertising, marketing costs or advancements in commissions to pay, for instance, to be published in a magazine or for a property to be adverted in property portals.
We visit your home to inspect the property and use our local market knowledge to provide you with an estimated value through a comparative market analysis. We also suggest the highest price we think your home could achieve and the timeframe in which we could achieve it. We do this to help you determine a price to list when selling your home.
A comparative market analysis is an examination of the prices at which similar or comparable properties in the same area or complex recently sold. We also provide you with information regarding similar properties that are available for sale on the market, which really indicates what sellers are hoping to obtain for their property.
We complete our comparative market analysis by assessing the quality of the area where the property is located, we take into consideration the complex or street in which the property is situated, we also consider the property type, its size, number of bedrooms, number of bathrooms, orientation of the property and views. We also take into account the extra features of the property (underground garage, storage room, air conditioning, under floor heating, etc) and community services when applicable. Other factors, such as the condition, additions and upgrades, necessary upgrades and date of construction, as well as price par m2 in the area, amongst many other aspects are also considered.
Since no two properties are identical, we make adjustments for the differences between the sold properties and the ones that are about to be sold, taking into account the special features that make your home unique.
Pro Tip: When deciding on the price to sell a home, look at the market through a buyer´s eyes and compare the home with what´s available on the market. Setting the right price to sell a home is one of the most important choices a vendor can make, by going too high in price the risk involved is to turn off every potential buyer on the market.
As long as we have key access to the property, it is not necessary. We will book an appointment and visit your property whenever it suits you. If you are not physically here, we can always access it via a friend, neighbour, lawyer or management company; many of our vendors aren’t actually on the Costa del Sol when they decide to put their property on the market with us. We can take care of everything else over the phone, email and video conference.
Yes, that´s not a problem for us. As long as the tenant knows it is for sale and allows us access to the property, keeps it clean and tidy, we can work around the tenants schedule to show your property. We are available for viewings 7 days a week.
Although many vendors believe that using more real estate companies to sell a home will increase the chances of finding a buyer, we strongly recommend against using more than one estate agent to sell a property.
These days most real estate agencies use property portals as their main marketing strategy. Clients regularly find the same property advertised in different property portals several times and on many occasions at different prices. Unfortunately this can be interpreted as a sign of desperation, often leading to not obtaining a good offer.
Choose an agent that uses several property websites, but is able to plan a full marketing strategy to sell your property not only based on property portals. If an estate agent is incentivized by not having to sell your property while listed with several agencies, the agent will put all the effort, time, energy and resources to market a property in the best possible way.
Pro Tip: Always obtain feedback from your estate agent on what tools and strategies are being used to market a property, if after a period of time, the results given are not the ones expected, then think of the option of changing agencies or adding a second real estate company to market your property.
It really depends on the personal circumstances of the owner rather than the market conditions in the Costa del Sol, so only the owners can decide what’s more convenient for them. But if you think, want or need to sell, the soonest you place the property on the market the better. On the other hand, if you’re not convinced about selling, feel free to contact us to discuss all the different options available for home owners.
Pro Tip: If a vendor is unsure about selling their home it is best not to place it on the market, as there is a lot of effort involved in selling a property. A great alternative to create revenue on the property is to rent it short-term, as this will assist with the payment of running costs of the property, whilst giving home owners the possibility to still enjoy their holiday home, while it´s not rented out.
FAQs by vendors on documentation required to sell a property on the Costa del Sol:
In order to list your property for sale or sell your property in the Costa del Sol, we require vendors or their lawyers to provide us with the following documentation:
- Copy of Passport, DNI (Spanish ID Card) or NIE number.
- Copy of the Escritura (public title deeds).
- A recent Nota Simple (Property Registry Filing).
- Licencia de Primera Ocupación (Copy of First Occupation License) or Licencia de Habitabilidad (Habitation License).
- Copy of your latest IBI receipt (Municipal Tax Receipt).
- Copy of your latest Basura receipt (Refuse Collection Tax receipt).
- Copy of your latest Community Fees receipt (when applicable).
- Contact details of the administrator of the Community of Owners (when applicable).
- A copy of the Community Statutes (when applicable).
- A copy of the last Community Meeting (when applicable).
- Certificado de Eficiencia Energética (Energy Efficiency Certificate).
- Copy of the latest utility bills (when applicable).
- Signed copy of our non-exclusive or exclusive sales agreement.
Pro Tip: Don’t wait until you have an offer to fix any possible issues with volumes or dimensions of the dwelling. If you have done any reforms to the property, make sure it has been correctly registered in the Land Registry and changes have been included on the Nota Simple, as most sales that are delayed or fall through is mainly due to the license or documentation not being in order.
Yes, a NIE (Foreign Identification Number) is a legal requirement to sell a property in Spain for all residents and non-resident foreigners, owning a property in Spain, regardless of their country of residency or nationality.
The NIE number acts as a tax and identification number, and is used in all fiscal transactions that involve the Spanish tax office. In case of selling a property the NIE number will be required to pay Plusvalía Tax (Municipal Capital Gains Tax) and Impuesto sobre Ganancias Patrimoniales (Capital Gains Tax), as well as requesting the 3% retention for non-resident vendors in Spain.
Yes, we collaborate with several companies that issue the Energy Efficiency Certificate and we can put you directly in contact with them. If you are not in Spain but require this certificate and you are selling or renting with our company, we will attend the appointment on your behalf at your property with the company free of charge.
Please bear in mind that if you wish to sell a property or rent it out for a period longer than four months, an energy performance certificate is a strict requirement.
Yes, if your property is located within a community of owners it is a great idea to obtain one, even if you have a holiday rental license in Andalucía. Take into consideration that having the holiday rental license does not mean that you can automatically rent the property short-term. If your property is located within a community of owners and the majority of these agree that short-term rentals cannot be carried out within the community, properties will not be allowed to be rented out for holiday lettings.
You must bear in mind that in the last year or so, with the increase of platforms like Airbnb, several communities have changed their policies regarding holiday rentals and decided not to allow short-term lettings for tranquilly and security reasons, therefore, to add value to your property, having this certificate will definitely be a plus.
Pro Tip: We have been receiving an increase of demand from clients wanting to purchase properties which can be rented out as short-term or holiday lettings. Having this authorization adds value to the property and many solicitors normally request this certificate prior to making an offer or placing a deposit.
FAQs by vendors on the process of selling a property on the Costa del Sol:
The selling process in the Costa del Sol is similar to the buying process in the sense of the steps which take place from the initial offer all the way to completion.
We present the vendor an offer on their property from a potential buyer either verbally or in writing. We encourage our buyers to accompany the offer with a Good Faith Deposit to the company´s escrow account or their lawyer´s escrow account. This offer is accompanied with an Offer and Deposit Document, which is a formal letter of intent, outlining in writing the terms of the offer (including sales price, date of the deposit payment, date of signing of the private purchase contract, date of completion and any other special terms that may apply to the offer). Once all the basic terms of the sale are agreed, the deposit is paid and the Offer and Deposit Document is signed by both buyers and vendors and the property is taken off the market.
As a following step, the buyer´s solicitor and vendor´s solicitor get in contact and exchange documentation. The buyer´s legal representative will complete all the necessary legal searches regarding the legal status of the property and will inform the buyers of any issues that may influence the conditions or decisions of the purchase.
When all the necessary documentation has been checked, a Contrato de Arras (Private Purchase Contract) is drafted. Normally the Private Purchase Contract includes more specific information in the terms of the sale. For instance, if the property is sold furnished, an inventory would be attached to this document.
Upon the signing of the Private Purchase contract by both parties, usually within two weeks from the signing of the Offer and Deposit Document, the buyer is expected to pay 10% of the purchase price (minus the amount already paid during the Deposit payment) to the vendor´s bank account or their solicitor´s bank account.
On the date of completion at notary, the balance of the purchase price (sales price minus the amount paid at the signing of the Private Purchase contract) must be paid to the vendor.
It is common practice here is Spain that a week before completion, the vendor`s and buyer´s solicitors, calculate all the pending expenses and costs that require cancellation prior to completion. Different bank checks will be drafted by the buyer´s solicitor to ensure, for instance, the cancellation of any existing mortgage loans, real estate agency´s fee, community fees or any other debt that might be pending. A series of retentions from the buyer´s solicitor will also take place to cancel any utility bills, as well as a 3% retention for non-resident vendors, ensuring that the property is transferred free of charges and encumbrances.
Pro Tip: Get ready for the sale from the very beginning. To avoid any completion delays, contact your solicitor as soon as you place the property on the market to confirm all the property documentation is in order, utilities and taxes have been paid.
Normally it is up to both buyers and vendors to agree on a completion date.
As a rough guide, it should take around 4 weeks to complete on the sale of a property in Spain, however, there are certain factors that can impact on timescales.
If a buyer is reliant on a Spanish mortgage, a completion could take around 6 to 8 weeks to take place, as the new Spanish mortgage laws implemented in 2019 include a 10 day “cooling off” period between the time the buyer receives Ficha Europea de Información Normalizada (European Standardized Information Sheet) and signing the loan documents, before being able to purchase the property at notary.
Over the years, we have had several cases, where the process run smoothly, the documentation was in order, the legal searches were done in an efficient manner and the funds were in place. In such cases we have been able to complete in approximately a week.
Until the signing of the title deeds at notary between buyers and vendors and the balance has been paid to the vendors, we are never 100% percent certain a completion on the sale of the property will take place, even if the due diligence and legal searches on the property have been completed.
After saying this, once all the legal searches have taken place, the special conditions of the sale have been accepted by all parties involved and the private purchase contract has been signed and 10% of the purchase price has been paid by the vendor, we can be 98% certain that the sale will take place.
Pro Tip: By organizing the buying and selling process in three stages: Deposit, signing of Private Purchase Contract and Completion, both vendors and buyers increase the opportunity of a successful sale to 99,99%. If vendors do not take a deposit or decide to go from deposit to directly signing title deeds, jumping the singing of the Private Purchase Contract, there is a strong possibility of misunderstandings between both parties during the process, ultimately leading to the sale of the property falling through.
FAQs by vendors on selling strategies for Costa del Sol property:
Some agents do an exceptional job at marketing and others do little to nothing but just placing your home in the multiple listing service (MLS). Finding out precisely what your real estate agent is going to be doing to sell your home is a very important question.
You can rest assured that as real estate agents we are here to help you with every step of the process, ensuring you receive the highest amount possible for your property, while respecting your desired selling time frame.
Depending on the type of listing you decide to do with us, we offer a broad range of services and marketing strategies, which include:
Free comparative market analysis, professional photography, professional filming, virtual 3D scans, floor plans, publishing your property in mayor worldwide property portals, email campaigns to our database of clients, email campaigns to our database of local and international estate agents, publishing your property in industry-leading real-estate networks, social media marketing, publishing your property in our website with thousands of visitors every month, publishing your home in our window displays, using real estate board signs, holding open houses, live streaming to host virtual property tours, assistance with home staging, assistance with collecting all the documentation necessary to sell your property, availability to show your property 7 days a week, client pre-qualification, amongst many other features.
Feel free to contact us to discuss all our options.
Pro Tip: With today´s technological improvements it´s easy for buyers to search properties on the internet. Listing a property with many agencies and having the same property advertised on the same property portals may be seen as sign of desperation and put buyers off; we always recommend using a maximum of one or two real estate agencies to market your property.
Yes, while many companies on the Costa del Sol tour any person that wants to view a property, we are very selective in our business as to who we work with.
We look at the qualification of potential buyers in two contexts; firstly we look at their real estate needs and requirements in relation to their financial capability. Secondly we determine our level of involvement in working with them based on several factors, including their urgency.
In regards to financial qualification of potential clients and in order to comply with money laundering regulations in Spain, we are required to ask clients to disclose the source of funds.
In scenarios where clients request assistance with finance, we put them in contact with different banks and financial advisors. Usually, when they have presented all the documentation and they are pre-approved for a mortgage, we start visiting properties. Once potential buyers understand their financial capability, they become pre-qualified potential clients.
With potential buyers that are purchasing a property with cash (no mortgage required) or with their savings, we still comply with money laundering regulations; therefore these buyers need to justify the origin of funds and we are able to pre-qualify them.
When visiting high-end or luxury properties here on the Costa del Sol, for instance in areas like La Zagaleta, Sierra Blanca and Los Flamingos Resort, for properties which sale´s price is over €4.000.000, it is very usual that we request potential clients evidence of proof of funds prior to visiting a property. In this kind of market, most vendors are advised by their solicitors to request an official bank statement, bank´s name and address, balance of funds in checking and savings accounts amongst other documentation, prior for visiting a property, therefore, even clients in the high-end market are qualified.
Pro Tip: Use an estate agent that qualifies clients, as potential buyers have the desire, means and resources to purchase a home and by qualifying them, you will not be spending your valuable time with viewings that won´t take you anywhere or with low offers that cannot be closed.
We’ve got the experience and tools to assist you how to figure out what your house is worth, assist you with home staging, tackle home improvement projects, get your house prepared for sale, and keep your home in peak condition, in order to maximize your earnings. We also work with different marketing packages to achieve maximum exposure.
Feel free to contact us, to discuss this in a more extensive manner.
Although we sell properties every month of the year, based on over 20 years’ experience of selling real estate on the on the Costa del Sol, we can say that the best months to sell your home in towns like Estepona, Benahavís, Manilva, Marbella, and other areas of the Costa del Sol are between the beginning of March and the end of the December.
In Spain, it generally takes around a month and a half to complete on the sale of your home, so it is still a great idea to list your property in the months of January and February, which tend to be a little bit quieter.
When selling a property on the Costa del Sol, we always begin by carrying an extensive free comparative market analysis which will inform you about what is available for sale in your complex or area, at what price were the last properties sold in your development or neighborhood and other important information, but answering this question, will largely depend on the vendor.
If the price is accurate, and/or if the vendor is prepared to negotiate, then it wouldn't be the first time we've sold a property at the first viewing or reserved it over the phone, as we have clients who only want to purchase in certain developments or neighborhoods.
Pro Tip: Choose an experienced estate agent to help you establish the price of the property by conducting a thorough market research. Hiring the right estate agent and pricing the property adequately, will have a direct impact on the duration of the property on the market.
It really depends on personal circumstances and the quality of furniture that´s is being included. In certain cases it can be a strong negotiating tool to close a deal if it is not included in the sale price.
In some cases, for instance, when a similar property is being sold in the same complex and the value of both properties is similar, considering the one that includes furniture gives the idea of obtaining a better deal than the one that does not.
On the other hand, if the furniture is included in the sales price of the home and the prospective buyer does not want it, they will expect a larger discount for not including the furniture in the deal.
Pro Tip: Don’t expect home buyers to pay nearly as much money as the buyer of the furniture included in a deal has paid, even if it has only been used for a very short period of time. Consider that requesting extra money for furniture can be a deal breaker, although including it can give you some leverage. It is always best to let the buyer make the first move in the form of a formal offer.
Selling a home is not easy and not everyone can accomplish it, if your home isn´t selling and you have had problems finding a buyer for your house then consider the following reasons:
-The estate agent you have chosen is not doing a good job.
-The marketing tools used for advertising the property are not sufficient.
-The qualities of the pictures of the property are poor or over produced.
-The house is too personalized or too cluttered.
-Home staging was not done correctly and the property doesn’t present to its full potential.
-A proper comparative market analysis was not carried on the property.
-The costs of the reforms or upgrades required were not taken into account when pricing the property.
-The price of the property is overvalued.
Pro Tip: Some estate agents deliberately mislead vendors as to the value of the property to guarantee a listing. Professional and reputable estate agents set realistic prices in order to achieve a sale in a timely manner. Try using the vendor services of Sur Estates which are free of charge, in case we do not find suitable buyer for your property. Obtain a free valuation today!
Although we use the latest advertising techniques and marketing strategies to obtain new clients on a daily basis, after having been on the real estate market on the Costa del Sol for over 20 years, we are delighted to say that most of our clients come from referrals.
Every year, former clients, buyers, vendors and tenants, their relatives and friends come to us because we provide an unrivalled customer experience and have a solid reputation for delivering outstanding results.
FAQs by vendors on types of Sale Agreements on the Costa del Sol:
Yes, we can sell your property as an “open listing”. An “open listing” is a non-exclusive real estate contract in which more than a real estate agent may be employed to sell a property.
Yes, we are very strict about our client´s privacy and we sell properties which are “off-market”. An “off-market” sale is one which is not publicly advertised to the open market. Our systems allow us to list your property without appearing on our website or on any of our collaborating agencies through the MLS (multiple listing Service). This way you can sell your property discreetly. One of the main advantages of selling an “off-market” property is that vendors obtain fewer viewings and more serious buyers.
A sole agency agreement is a type of contract in which vendors of a property appoint just one real estate company to market a property for a determined period of time.
The duration of exclusivity contract is agreed by both vendors and real estate agents and varies according to the size and type of property which is marketed.
A reputable real estate company will only offer a sole agency contract when the valuation’s agent feels the asking price is correct and the sales team feels truly capable of selling the property in the allocated time frame, as the efforts involved and marketing costs are much higher than an open or regular listing.
Sole agency contracts offer estate agents the confidence and time to dedicate all their marketing efforts and resources to work towards a personalised strategy to sell a property.
The difference between selling as an open listing and as a sole agency at Sur Estates is that vendors obtain additional services and additional marketing strategies at no extra cost in the case of sole agency instructions.
We ensure your property is presented to potential buyers in the best possible manner, using the best home staging practices, professional photography, multilingual written specifications and floor plans. Additionally, we study each particular case, where we can organise a series of actions, like an open house event and live streaming to host virtual property tours, amongst other advertising strategies.
As one of the most established estate agents on the Costa del Sol, we are trusted by many vendors to act as their sole point of contact, key holder and manage relations with other agents on behalf of the owner. We offer your property to our local and international network of agents, with which we have established long and professional relationships, through different MLS platforms.
We organize all appointments, even if the vendor is not able to attend them. In cases where the property is occupied, we work around the vendor´s schedule, rather than the other way around, which seems to be an industry standard.
Our experienced team of property consultants, with an average of more than 20 years’ experience in real estate, will able to provide expert advice by studying in detail all the aspects of your property, apart from sharing with clients, in-depth information about current market conditions and local market knowledge.
Feel free to contact us to discuss the different sole agency plans we have for our vendors.
Pro Tip: Sole agency agreements create a mutually beneficial relationship that gives us the confidence to invest all of our resources, our time and experience to sell your property for the best price in the shortest possible time, while keeping the transaction smooth.
Yes, sole agency or exclusivity is the most effective way to sell your property. Our team is fully committed to selling exclusive listings, has access to a wide variety of resources and is always focused on obtaining the highest price possible for the sale of your property.
We strongly advise vendors against instructing multiple agencies to market their property, as the value and uniqueness of the home can be damaged if advertised by different companies.
Using sole agency saves time, increases value and simplifies the selling process for owners. Furthermore, our experience has proved that with exclusivity properties sell faster.
Pro Tip: Try our sole agency agreement, which is our most frequent type of estate agent contract used by our vendors with a success rate of 97%. This way we are confident to use all of our marketing strategies and incur in all marketing costs during the term of the contract. If we don’t find a buyer, vendors do not have to pay any fees.
FAQs by vendors on Costa del Sol property viewings with clients:
A buyer’s first impression is one of the most crucial aspects of selling a home. By applying the following simple actions, you can ensure that the buyer feels good about your home when trying to sell your property on the Costa del Sol:
- Present the home clean and tidy. Removing all excess clutter is essential, as you want the home to feel as spacious as possible.
- Make sure all of the curtains are drawn, the shutters are lifted and the home is getting good natural sunlight.
- Turn on lights in any areas of the home that could require additional lighting.
- Take the property orientation into account and try to organize the viewing when the property has more natural light.
- Pay attention to bad odors outside or too much noise, it may be better to keep them away. On the other hand, if you are going to place scents on your home do not over do it.
Our experience shows that the perfect formula for selling your home is a combination of the two. A furnished home will sell quicker than an empty one. A prospective buyer needs to be able to picture themselves in your home and needs to understand its dimensions, which is more difficult to do when the property is empty.
On the other hand, too many personal items and clutter tends to distract them. We can help you with home staging, when placing the property on the market.
Questions being asked by buyers during a visit to a particular property are a clear sign of interest. Here are the top 10 most common questions asked by our clients:
- Why is the vendor selling?
- How long has the property been on the market?
- How much are the community fees and taxes?
- How old is the property?
- How long have the vendors owned the property for?
- Is the property sold furnished or unfurnished?
- Can I make any reforms or extend the property?
- Have there been any offers on the property yet?
- Is there room for negotiation?
- How quickly can we complete the purchase?
Pro Tip: Be honest about the answers and prepare them in advance, either for the estate agent or for the vendor to answer them during the visit.
Yes, we are present at all property viewings, even on weekends and will give you feedback on every viewing within 2 working days.
In most cases, it isn’t an advantage for a seller to be present at a viewing. It can make potential buyers feel uncomfortable; make them spend less time in your property and unable them to ask certain questions. However, we leave this entirely up to the owners.
The duration of a property viewing on the Costa del Sol can vary depending on various factors. On average, a property viewing usually lasts between 30 minutes to 1 hour. However, it's important to note that the duration can be influenced by factors such as the size and type of the property, the buyer's level of interest, and the complexity of the viewing itinerary.
Yes, there are a few factors that can extend the duration of a property viewing on the Costa del Sol. For instance, if the property is larger or more luxurious, potential buyers may require more time to explore all the rooms, amenities, and outdoor spaces. Additionally, if buyers have specific questions or want to discuss details with the real estate agent or vendor during the viewing, it may also contribute to a longer duration.
FAQs by vendors on a Costa del Sol property offers to purchase a home:
The answer varies depending on the property type, the period in which the property has been on the market for and how the market conditions are when the offer is placed, but in general terms an acceptable offer in the real estate market on the Costa del Sol is considered between 5% to 10% below asking price.
Pro Tip: Before accepting or rejecting any offer, take into account if the buyer is a cash buyer or requires finance to complete the purchase, how quickly the buyer is willing to complete and if there are any special conditions for the completion of the sale.
There are several important factors which a vendor has to take into account when an offer to purchase their home has been presented:
Is the offer cash or does the buyer require finance to complete the purchase?
What are the conditions that come with the offer?
How quickly is the buyer able to complete?
Has the perspective buyer placed offers on other properties?
Is the buyer willing to pay a deposit if the offer is accepted?
How long has the property been on the market for?
Has the property had any other offers?
Will the vendor obtain a better offer in the near future?
The list price or asking price is the price the vendor of a property has placed a property on the market for, it is what a seller is wishing to obtain. It is also the price which a top real estate agent, should be able to achieve for the sale of a home.
The sales price is the actual amount which the vendor is willing to accept and the buyer is willing to pay for the sale of a particular property.
Prop Tip: Choosing a reputable estate agent with great experience, with local market knowledge, skillful negotiating capabilities, that puts the interest of the vendor first is essential to achieve the maximum price in case of an offer.
We are not affiliated to any Costa del Sol lawyers or law firms, however, we can provide you with a list of fully qualified and professional solicitors for you to contact.
Yes, we know of different removal companies on the Costa del Sol which deliver goods and furniture all over Europe. Do not hesitate to contact us to provide you a full list.
We are affiliated to several foreign exchange companies in the Costa del Sol and we can provide you with a list of fully qualified and professional international money transfer companies for you to contact.
Pro Tip: Foreign exchange companies charge less commission when compared to the average high street bank. The exchange rates of many currency specialists are better than most banks and rates can be booked prior to making a money transfer. Always compare with several foreign exchange companies to obtain the best possible offer.
Yes, we work with different accountant firms that can assist you paying any type of tax for both residents and non-residents in Spain, including tax returns, non-resident tax for property owners or rentals.
FAQs by vendors about costs and taxes when selling your Costa del Sol property:
The costs involved in selling a property in Andalucía can be divided in two different parts, the taxes one is accountable for when selling the property which are mandatory to pay and other general costs which may apply to the sale of your property.
When selling a property in Andalucía, you are liable for two different taxes. Plusvalía Tax (Municipal Capital Gains Tax) and Impuesto sobre Ganancias Patrimoniales (Capital Gains Tax).
These taxes vary according to different parameters, for instance, the Plusvalía Tax is calculated on the basis of the increase in value of the land on which the property is located. This value will vary from one town hall to another, but will largely depend on the period of ownership, the location of the property and surface area the property occupies, all related to its Cadastral Value. Usually the Cadastral Value is lower than the market value of the property.
The Capital Gains Tax is calculated on the profit obtained from the sale of your property and is based on your residency tax status here in Spain. As a general guideline, for non-resident property owners in Spain, members of the European Union, plus Iceland and Norway, the current rate is of 19%. This tax goes up to 24% for property owners which are non-residents in Spain and residents in other countries.
Spanish residents who sell a property in Spain will also pay a Capital Gains Tax depending on the obtained benefit. The rates are currently as follows: up to 6.000 Euros, the tax rate is 19%, from 6.000 to 50.000 Euros, the tax rate is 21%, from 50.000 Euros and up, the tax rate is 23%.
Other cost may include using a real estate agency when you sell your property. If you decide to use a real estate company to sell your property in Spain, the fee is between 3% to 5% of the sale price, plus 21% VAT. These fees are considered an expense that can be deducted when calculating the Capital Gain Tax associated with the sale.
If you decide to use a lawyer to represent you in the sale of your property to ensure all checks are carried out and taxes are paid correctly, in general, the fees come to 1% of the sale price, plus 21% VAT. These fees are also considered an expense that can be deducted when calculating the Capital Gain Tax associated with the sale.
In compliance with European directives, you will be required to present an Energy Efficiency Certificate, prior to placing the property on the market. By Spanish law you will also be required to provide an updated Nota Simple (Property Listing Filing) which can be obtained from the Land Registry and includes a legal report of the property with information like, who owns the property, address, general description of the dwelling, etc.
If you have a mortgage, you will have to cancel it before completion at notary and this possibly implies a mortgage cancellation fee which is paid by the vendor.
In certain cases, you may also want carry certain repairs or house improvements to make the property more appealing to prospective clients.
Pro Tip: We recommend contacting an accountant or solicitor to obtain an estimation of the taxes and costs involved in selling a property, as soon as the property is placed on the market in order to avoid any disappointments when an offer is presented.
The payment of Capital Gains Tax in Spain has some exceptions. For instance, any person residing in a country of the European Union or the European Economic Area that has an agreement for the exchange of tax information with Spain may benefit from the exemption for reinvestment of a primary residence, which does not necessarily need to be here in Spain.
Spanish residents over 65 years of age are exempt to pay this tax, if they sell their primary residence. Spanish residents under 65 who sell their primary residence and reinvest within three years to purchase another first residence are exempt to pay this tax on the amount reinvested.
Most vendors include expenses such as using the services of a real estate agent, the services of the a lawyer, taxes incurred when the property was bought, and also include the expenses incurred in upgrading your property, to either avoid paying this tax or reduce the amount of Capital Gains Tax that needs to be paid.
Pro Tip: We suggest speaking to a solicitor or tax specialist as soon as the property is placed on the market in order to analyse each particular case and to be able avoid any surprises in case of a sale.
To prevent that a vendor that is non-resident in Spain leaves the country with outstanding debts to the Tax Authority, the Spanish Government has introduced a 3% Retention, when you are selling a property in Spain.
The buyer has the obligation to withhold this 3% retention of the sales price from the vendor, when completing the sale of property at notary. The buyer then has the obligation and a period of 1 month to pay this retention to the Tax
Authorities on your behalf. By making the buyer pay this rather than the seller the Tax Authority can make sure that it is paid.
The Tax Authority then checks whether there are any outstanding taxes payables by non-resident vendors, for instance, if the seller has paid or not the annual non-resident tax for owning a property in Spain.
As this 3% retention is not a tax, but retention, sellers have the possibility to request a refund up to 3 months after it has been paid. If there are no outstanding debts, then the Tax Authority will refund the 3% retention to the vendor. This process can however take as long as 18 months.
Pro Tip: If you are due to receive the 3% retention back from the Spanish Tax Authority, we recommend leaving your Spanish bank account open and include the details of this account into the 210 reclaim form.
FAQs by vendors on the completion of a home on the Costa del Sol:
As notary fees are normally paid by the buyer of a property, it is the buyer who normally chooses the notary in which the title deeds are signed. After saying this, it is common that both parties suggest, apart from the date of completion, in which notary office both buyers and vendors should meet to complete the sale of a property.
No, it is quite normal that vendors sign power of attorney to their solicitor and do not attend the signing of title deeds at notary. We do, however, suggest that if the property is sold furnished, that personal items are removed prior to handling over the keys.
Pro Tip: Signing power of attorney to a solicitor is cheaper and faster to be done in Spain, rather than in the country of origin, as it will require to have a Hague Apostille or the document to be validated by the Spanish Consulate, apart from adding the translation costs.
Yes, it is quite standard that the buyers request to visit a property prior to completion to make sure that everything is in order, especially if in the sale of the property the furniture has been included or certain repairs agreed to be completed. Normally, buyers will visit the property a few hours before completion takes place.
Yes, we recommend all vendors to leave their Spanish bank account open for several reasons, including cashing the payment of the home, paying any possible outstanding bill or request the refund of the 3% retention for non-residents in Spain.
Do you have any questions that have not been covered here?
All you have to do is ask one of our experts, and we will be more than happy to provide answers and guidance regarding selling your property in the beautiful Costa del Sol. Start your journey towards a successful sale today!