Selling your home in Spain: how to prepare as an overseas owner

Most people who buy on the Costa del Sol give little thought to selling on the day they sign. But life changes: the children grow up, health sets new limits, or you simply want something different further up the hillside. Selling in Spain is not complicated, but it works differently from what you may be used to, and in our experience the smoothest sales are almost always the ones where the owner started preparing a few months before the home went on the market.

Gather the papers first

You will need the title deed (escritura) from when you bought, a recent nota simple from the Land Registry showing that the home is in your name and any charges on it, and a valid energy performance certificate (certificado de eficiencia energética). Spanish law requires the certificate when a home is sold: the energy label must appear in every advertisement, a copy goes with the sale contract, and it is valid for up to ten years. In our experience it costs a few hundred euros, and it should be ready before the listing goes live.

The buyer will also normally ask for the latest receipt for IBI, the annual municipal property tax, and documentation of any extensions or alterations. At the notary you must present a certificate from the community of owners showing whether you owe any fees, so ask the administrator in good time. If anything is untidy, it is far better to find out now than two days before signing.

Setting the price

In our experience, many owners are pleasantly surprised by what their home is worth today. But the market is more nuanced than the headlines suggest: two apartments in the same development can be priced quite differently depending on floor, view, sunlight and the standard of the kitchen and bathrooms. A realistic asking price based on actual sales nearby almost always gives a quicker sale and a better final price than an optimistic one that has to be cut twice. You can search current listings to see what else is on the market.

The costs of selling

In our experience, agency fees on the Costa del Sol are normally four to six per cent of the sale price. Most sellers also use a lawyer, typically around one per cent plus VAT.

The seller also pays the plusvalía municipal, a municipal tax on the increase in value of the land. Each town hall sets its own rate, up to 30 per cent, and the amount depends on how long you have owned the property. If the land has not gone up in value, no tax is due, and you can ask for it to be based on your actual gain if that is lower. When the seller is a non-resident individual, the law makes the buyer liable to pay it in your place, so in our experience the amount is held back from the price at completion. The sale must be declared to the town hall within 30 working days.

All in all, in our experience you should budget for around seven to ten per cent of the sale price in total selling costs, before capital gains tax.

Capital gains tax and the 3 per cent withholding

Capital gains tax causes the most uncertainty, but the system is fairly predictable. For non-resident sellers, the rate is 19 per cent of the net gain: the difference between what you sold for and what you originally paid, adjusted for documented buying and selling costs and for improvements. Ordinary maintenance and repairs cannot be deducted, so keep the receipts for improvements throughout the years you own the home, because they reduce the gain and with it the tax.

Because you live abroad, the buyer must withhold 3 per cent of the agreed price and pay it to the Spanish Tax Agency on Form 211 within one month of the sale, as an advance on your tax. You then file your own return on Form 210 within three months after that one-month period, where the actual gain is worked out. If the tax comes to less than the 3 per cent, you get the difference back. If it comes to more, you pay the rest.

Check how your home country taxes the gain

Spain is not necessarily the only country with an interest in your gain. If you live in the UK, for example, the UK government explains that a gain on property abroad can be taxed both in the country where the property is and in the UK, and that you claim relief in the UK for the foreign tax. If you live elsewhere, check how your home country taxes the gain. Talk to an adviser who knows both countries before you sell, especially if you plan to take the money home in another currency.

A well-prepared sale

A good sale is as much about the practical side as the paperwork: a thorough clean, a lick of paint where needed, tidy outdoor areas and good photos in the right light do more for the price than most people think. At Solkystmegleren we help you all the way, from an honest valuation and the documents to viewings, negotiations and the notary appointment. Our selling guide takes you through each step, and you are welcome to get in touch for a no-obligation chat about what your home is worth today.