Fiscal and legal advice from Webster Asesores Dear Sir,
Having owned a property for about 20 years in the Costa Blanca, we have decided to sell. The estate agent tells us the there are certain documents we require, and our solicitor is saying differently.
We are therefore confused, and would appreciate your advice in the Costa Blanca News as it may help with other readers in the same situation. Answer
If your property is situated in the Valencia region, you are obliged to provide your buyer with an occupation licence (used to be called the Habitation Certificate) issued by the Town Hall and an energy efficiency certificate. You will also have to provide copies of all last utility bills and the local IBI and rubbish collection bills.
If the registered description of the property does not coincide with the physical description, you will be obliged to sign a new ‘escritura’ in order to rectify this discrepancy.
In order to do this, you will require the services of an architect, who will issue a certification stating the measurements of the building and the description.
This new ‘escritura’ has to be signed in the presence of a Notary. A stamp duty of 1.5% of the value of the work has to be paid to the tax office, and then the new deed can be presented to the corresponding land registry for registration.
Usually it is the buyer’s solicitor who draws up the private purchase contract and this document will regulate the transaction.
The price of the agreed sate, the amount of the deposit, and the completion date will be included. This document will also determine who is obliged to pay for the costs. Usually all the costs are paid by the buyer, with the exception of the plusvalía tax.
However, sometimes it is agreed that the costs will be paid in accordance with the law. The law determines that part of the Notary fees and the plus valía tax are paid by the vendors, and the buyer pays also part of the Notary fees, the land registry fees and the purchase tax. Your solicitor will be able to give you more information in this respect.
If you are a resident in Spain for tax purposes, you are obliged to file the Capital Gains Tax in your income tax return the year after the sale takes place.
If you are a non-resident in Spain, the buyer’s solicitor will probably retain the amount due to the town hall in respect of the plusvalía tax, to guarantee its payment, as is if it isn’t paid the buyer will have to pay it as it is attached to the property – even if it is agreed that you have to pay it in accordance with the law.
Further, if you are a nonresident 3% of the sale price will be deducted from this amount and deposited with the tax office. This payment is considered to be a payment on account of the Capital Gains Tax.
If this tax is higher than the 3% that has been retained, you need to apply for a refund of the difference. If the 3% does not cover all the tax that is due, you are obliged to pay the difference.