Mortgage subrogation? Mortgages are the order of the day, and it is not surprising that we find ourselves in the situation of finding, as buyers, a home for sale and that the seller himself offers us the option of mortgage subrogation. Mortgage subrogation is an operation that has been carried out for a long time, … Read more
Did you know that it is possible to carry out all contracts after a move in an easy and simple way? In this article we explain how to do it and how you can find the cheapest electricity and internet rates. Fiber or prepaid internet at home? Finally the day arrived. After months looking for … Read more
Sales contract with semi-exclusivity
The real estate agency Edeal Homes works with the majority of its properties with an exclusive contract, since we believe that we are able to sell the property in less than a year if it is at market price, but we are open to other types of contracts because the final objective that we pursue is the satisfaction of our client and obtain the maximum benefit for both parties.
A good real estate agent in Dénia These are, in our opinion, the 10 skills that a Real Estate Agent in Dénia should have: 1. Always work on behalf of your clients and seek the best benefit for them. A good real estate agent sole purpose is not to sell, but to make customers through … Read more
Sale of properties with exclusive contract in Denia The sale of properties with exclusive contract in Denia is a form of sale that surroundsmany prejudices, so the writing of this post, since in Edeal Homes wehave decided to focus on this type of sale and we want to explain topotential customers their features : The … Read more
Retention of 3% of the value of a home in non-resident vendors
The retention of 3% of the value of a home in non-resident sellers is an issue that many foreign owners still do not know in Spain. It is very important to be aware of this retention, especially if we are the part that is going to buy the house, since then they can claim it from us.
Why should this withholding be applied?
When a non-resident sells his home in Spain, he signs before a notary and as he has no further obligation in Spain he can return to his country or wherever he wants. So … how are the relevant taxes claimed? Well there it is, the buyer is responsible for retaining 3% of the sale value of the home.
Therefore, before going to the notary to sign the deed of the house, it must have been agreed with the seller of the house that 3% of the sale price will be withheld and therefore we will deduct it in the check that we will deliver , or the agreed payment method.
What is paid with this withholding?
The seller of the home has the obligation to pay taxes for the profits obtained when making the transfer, difference between what the acquisition cost and what he obtains for the sale.
This is a tax different from the municipal CAPITAL GAIN TAX, but that the buyer must also retain the seller because in case of default by the owner the new one will be claimed.
Normally the term to present the payment of this tax is one month from the signing of the deed of the house, and once this has been settled with the model 211 of the Tax Agency. See model Here.
The Tax Agency will return to the seller the remaining part (if applicable) when making the declaration and income of the tax when the final amount is known within the deadlines established in the relevant Law, see Here
The seller may provide a document issued by the Tax Agency certifying that it is not subject to the withholding of this Tax.
For more information on Income Taxes of non-residents with permanent establishment or without permanent establishment see Here.
What is capital gains tax in Spain?
Capital gains is a municipal tax that is applied when selling or donating a home to the City Council that manages the urban land.
Who should pay the capital gains tax in Spain?
The selling part of the house is the one who must pay the city tax.
On the contrary, if it is a donation, the person who receives the property will be the one who must pay the tax to the City Council where the property is located.
If it is an inheritance, the beneficiary must also pay the tax.
What is the main problem about capital gains?
The real estate crisis does not end when one thinks it ends, there are always repercussions, and the payment of capital gains value is one of them.
Previously, having paid an exorbitant price for a home that was not worth it (or worse, having been mortgaged) when the property was sold, whether it was profitable or not, the tax had to be paid.
Since the ruling of the Constitutional Court in Spain of July 2018, this tax can be canceled if a sale has generated a loss, but the collection can be requested in case of earnings.
How to calculate this tax in Spain? Approximately …
If you want to know the amount you should pay the best will be to ask in the same City Hall where the home has been sold. There you will be informed of the amount you would have to pay. If you need more information about that go to Contact
The amount to be paid from capital gains tax is calculated according to the last transaction, but with a maximum term of 20 years. For this purpose, a certain percentage that varies greatly between the different municipalities is applied to the cadastral value.
Here an (approximate) example of how it would be:
The tax base is calculated according to the cadastral value of the land and the time that the seller or donor party in their possession has had.
A person buys an apartment in 2008 and sells it now. The cadastral value amounts to 150,000 euros. The Town Hall of the housing population puts a revaluation rate, which will be the result of 3.5 multiplied by the eleven years that have now passed in 2019.
3.5 x 11 years = 38.5%
This figure may vary depending on the municipality. As a result, we have a 38.5% that applied to the cadastral value of 150,000 euros leaves a tax base of 57,750 euros.
150,000 ___________ 100% x = 57,750.- €
x ___________ 38.5%
More information for Denia Here