SALES EXPENSES

EXPENSES FOR THE SELLER WHO IS A TAX RESIDENT IN SPAIN:

MUNICIPAL CAPITAL GAIN: (Tax on the Increase in the Value of Urban Land):

It is a municipal tax calculated by the property registry office. It depends on the size of the apartment and the year of construction of the complex. It also depends on the current value of the land on which the property is built and how many years the sellers have owned the property.

PATRIMONIAL PROFIT ARISING FROM THE SALE OF THE PROPERTY: 

If you are not a tax resident in Spain, you pay a fixed 19% tax (IRNR) on the profit obtained from the sale (the difference between the purchase price and the selling price). If you are a tax resident in Spain, however, the percentage is progressive based on the amount earned on the sale. It ranges from 19% to 24% depending on the amount earned. In this case, it is called IRPF. Tax residents can exempt themselves from paying this tax only if they buy a house within three years using the entire proceeds from the sale (NOT JUST THE PROFIT) and demonstrating that the new property is their habitual residence.

IBI (Property Tax):

It is an annual tax. It is usually shared between the buyer and the seller in proportional parts according to the month in which the sales deed is signed.

EXPENSES FOR THE SELLER WHO IS NOT A TAX RESIDENT IN SPAIN:

MUNICIPAL CAPITAL GAIN (Tax on the Increase in the Value of Urban Land):

In the case of a seller who is not a tax resident in Spain, the MUNICIPAL CAPITAL GAIN is deducted from the sale price. It is subsequently paid by the buyer.

Capital Gain due to Income Tax

To ensure tax collection, the law provides that the buyer withholds 3% of the sale price( NOT OF THE AMOUNT EARNED) and makes the payment of this amount. This 3% is deducted at the time of the issuance of the checks for the balance that the buyer gives to the seller at the notary at the moment the sales deed is signed.

IBI (Property Tax): 

The cost of the IBI for the year in which the property is sold is usually shared between the buyer and the seller in proportional parts. This is based on the month in which the sales deed is signed.