10 easy steps to sell property in Spain

Raymundo Larraín Nesbitt, June, 25. 2024

Raymundo Larrain gives a sweeping overview on how to sell property in Spain safely.

Marbella-based Larraín Nesbitt Abogados (LNA) has over 21 years of experience at your service. We offer a wide range of 60 legal and corporate services. Our team of native English-speaking lawyers and economists have a long track record of successfully assisting expats all over Spain.

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By Raymundo Larraín Nesbitt
Director of Larraín Nesbitt Abogados
8^th of July 2024

Introduction

Today’s article mirrors last month’s Ten easy steps to buy property in Spain.

The following article aims to be a basic checklist covering what I reckon are the ten basic points, nothing more.

There are two taxes involved on selling Spanish property: Capital Gains Tax and Plusvalia Tax.

I’ve divided my article into five points pre-completion and five points post-completion.

As a word of caution, never hand over your house keys before completion (at the notary). As explained in our article: POSSESSION: why you should never hand over your house keys BEFORE completion.

Ten easy steps to sell property in Spain

I. Pre-completion

1. Hire an estate agent

Estate agents in Spain, for the most part, remain unregulated. This means that anyone can be an agent, but few stand the test of time

Good estate agents are proactive, they prove invaluable as they help to fetch a fair sales price in a short span of time (months). By contrast, bad agents are passive, and your house will be on sale for years.

A seasoned agent will decide on what’s the best market strategy to sell your property giving you all kinds of useful tips. Make sure you take to heart these tips, as they greatly impact on positive property viewings. Always ask your agent for feedback after each viewing, taking action where necessary to turn around negative feedback.

On selling, you need to list your property with a property platform such as IDEALISTA (Spain’s number one) or with one, or more, agents. Be mindful of giving an agent exclusivity on your property unless you are sure of what you are doing.

Hallmarks of reputable agencies:

The estate agency has been around for a long time (years, even decades)
Ask around for referrals from people you trust
Member of RICS, which works to (high) British standards
Member of LPA (Leading Property Agents), or similar
Glowing reviews and stats across multiple platforms (Trustpilot, Google reviews, etc)
Excellent contact network
Superb local market knowledge

Do not trust estate agencies that flaunt shady ’real estate awards’. Every week I'm emailed three of these ‘international awards’ in exchange for money.
Remember, unlike in other countries, estate agents work only for the seller.
Agent’s fees are 100% tax-deductible on selling your property in Spain.

2. Hire a lawyer

Hiring an independent lawyer is the best advice I can give you. If you are a non-resident in Spain (particularly a foreigner), you are strongly advised to instruct a lawyer to assist you through the conveyance procedure. Lawyers are regulated by professional bodies, subject to disciplinary action. Lawyers have professional indemnity insurance in place in the event of malpractice or negligence. Your appointed lawyer can do all the following, and more:

Line up all the required documents
Avoid payment scams
Avoid abusive sales commissions
Avoid possession issues
File a 3% tax rebate
If selling at a loss, filing a tax rebate on the Plusvalia Tax
Dealing with other lawyers, tax office, agents, banks, notary, community of owners, town hall, etc.
Dealing with utility companies (water, electricity, gas, landline, etc)
Discharge a pre-existing mortgage on the property. Buyers demand a clean title, they don’t buy with a mortgage against it
(Greatly) mitigate the seller’s Capital Gains Tax liability (on average reduce your tax bill by 70% or more)
Negate the CGT on reinvesting the sales proceeds on a new main home (even outside the EU i.e. in the United Kingdom).

Lawyer’s fees are 100% tax-deductible on selling your property in Spain.

3. Price to sell

It’s of critical importance a seller adjusts the asking price to match market expectations.

I understand - and it is perfectly human - that owners have a penchant towards overpricing their property, all the while overlooking its flaws. However, if you want a smooth sale within a reasonable timeframe (3 months), you must pick an asking price that matches a realistic valuation. Otherwise, you can be waiting for years on end until the property is sold. It is not uncommon to hear people have waited over a decade to sell in Spain (because they did not price the property correctly).

In my professional experience, properties that have been on the market for too long (6 months plus) become a stale listing which acts as poison; would-be buyers start wondering if there is something wrong with the property which drives the sales price in a downward spiral. Unrealistic pricing leads to long sales times.

Remember, be smart, price to sell.

4. Tax compliance

It is strongly advised that sellers are up to date with their tax and maintenance expenses. If you are in arrears with your taxes, this may impact adversely your tax rebates post-completion (see below).

Buyers, on running a due diligence on the title, will get a poor impression when a seller has fallen in arrears. Moreover, in some cases, falling in arrears may even jeopardise a house sale i.e. when a buyer needs a mortgage loan to complete (lenders do not borrow against properties with debts).

5. Documents to sell

As mentioned in the first point above, your lawyer can (greatly) assist you in collating all the necessary paperwork to sell.
The following list is not exhaustive:

Full scanned copy of your title deed
Copies of your national ID, passport, NIE number
Copy of recent utility invoices
Copy of IBI tax invoices
Copy of Refuse Charge (Basura, in Spanish)
Energy Performance Certificate
Licence of First Occupation
Scanned copies of the minutes of the last three General Assemblies
Community of Owner’s Certificate stating the property being sold is not in arrears
Spanish fiscal residency certificate (to avoid a 3% retention on the sales proceeds)
Etc.

If all the above points check out, you are ready to roll. A property sale follows three stages in Spain:

Sign a reservation contract: in exchange for getting paid €3,000 or €6,000 (dependent on the sales value) you reserve the property over the next 30 days, during which the sales contract must be signed. This is a simple one-page document drafted by the listing estate agency.
Sign an arras contract (sales contract): the buyer makes a non-refundable 10% deposit. This detailed contract stipulates a day and time to sign at a notary plus all the sales conditions. This contract is drafted by the buyer’s lawyer.
Completion at a notary office. The balance of the asking price is paid and the keys are handed over (possession).

II. Post-completion

6. Capital Gains Tax mitigation

CGT for non-residents is 19%. Again, your lawyer will assist you in gathering all the necessary paperwork to bring down your CGT liability on selling, within the law. Your lawyer can reduce your tax bill by 70%, or more. This is explained in detail in our article Capital Gains Tax mitigation on selling (or gifting) property in Spain.

7. Plusvalia Tax rebate

If you are selling at a loss, you can file a tax rebate on the Plusvalia Tax you’ve paid.

8. 3% tax rebate

By law, buyers withhold 3% of the sales proceeds if a seller is a non-resident. A lawyer can file a tax rebate on the seller’s behalf on all, or part, of the 3%. If a seller is in arrears with his property taxes, this precludes a tax rebate. This is explained in our taxation article: How to file a 3% tax rebate on the sales proceeds of your Spanish property.

9. Serve legal notice to your community on the house sale

Your lawyer can notify them on your behalf. The reason on why this is necessary is so that all the new invoices they raise are against the buyer, not against the seller. This ringfences your liability.

10. Closing your Spanish bank account & dealing with transfer of utilities

Your lawyer can advise you on this. If you close your account too early, you will jeopardise the tax rebates from the Spanish Tax Office (meaning you lose all your tax refunds!).

Again, your lawyer can ensure the utilitie's contract transfer is smooth, avoiding payment issues or supply disruption.

Conclusion

If you plan to sell property in Spain, and are a non-resident, contact us to assist you in the legal procedure. We act nationwide.

At LNA we make it all easy, so you just have to sit back and relax. We take care of everything removing all the associated stress.

Not to mention our fees are 100% tax-deductible on selling!

21 years of experience at your service.

Related services available from LNA:

“Même s'il me faut lâcher ta main / Sans pouvoir te dire à demain / Rien ne défera jamais nos liens (...) L'amour est plus fort que le chagrin.” – Françoise Hardy

Françoise Madeleine Hardy (1944 – 2024). Born in Paris, was a gifted French singer-songwriter and actress. Mainly known for singing melancholic sentimental ballads (Tous les garçons et les filles), Hardy rose to prominence in the early 1960s as a leading figure of the yé-yé wave, and went on to become a cultural icon both in France and internationally. In addition to her native French, she also sang in multiple languages. Aussi belle que douée.

At Larrain Nesbitt Abogados (LNA) we have over 21 years of experience specializing in immigration & residency visas. We also assist clients in buying, selling, or renting properties in Spain. You can contact us by e-mail at info@larrainnesbitt.com, by telephone at our UK line (+44) 0754 3838 218 or Spanish line (+34) 952 19 22 88, or by completing our contact form.

Please note the information provided in this article is of general interest only and is not to be construed or intended as substitute for professional legal advice. This article may be posted freely in websites or other social media so long as the author is duly credited. Plagiarizing, whether in whole or in part, this article without crediting the author may result in criminal prosecution. Ní neart go cur le chéile. VOV. Soyez réalistes, demandez l'impossible.