There are a number of different ways that you can go about selling your Spanish property: you can approach a reputable estate agent and agree to work with them for a commission, you can advertise in local foreign language publications in Spain; or you can advertise in the newspapers in your home country.
Property prices rose dramatically over the past number of years, making real estate on the Costa del Sol quite high. Today, the property market has slowed and, with fewer buyers and many requiring large mortgages, it is important to be realistic about the price you are asking for the property.
PRICES AND CONDITIONS:
Before meeting the first buyer, you must have decided on price and conditions for the sale. It is wise to discuss prices with experienced local Estate agents such as Sol Homeseekers, to get an idea on the price you can expect or by having an evaluation done. We recommend you establish two sums in your mind: the asking price that should give room for negotiations with the buyer, including eventual sales commissions, and the bottom price that is the net you will want to receive for the property, under which you are not willing to sell.
You may fix the price in any currency you prefer. It may be best use currency of the country where you will be depositing the money. There are no legal or other obligations forcing you to establish the sales price in any specific currency. If payments are made in another currency, they will have to be calculated at the rate of exchange on the day they are being made, so that you can be sure to get the agreed value.
SELLING YOUR PROPERTY OUTSIDE SPAIN:
As a foreigner you can sell your Spanish property in any country outside Spain, fix the sales price in a foreign currency and receive the money abroad. You can even make a title deed (escritura) to the buyer stating that you have been paid in foreign currency and abroad. Foreign currency or Euros can be mentioned in the title deed.
However, keep the following in mind:
* If you use a Spanish general consul outside Spain as a notary, you must ensure the "primera copia" of the title deed is brought to the corresponding property register in Spain within 30 days. The consuls do not send the deeds to the property registers as a normal notary would. Some of the consuls refuse to make property escrituras, due to the obligations imposed by the new Notarial Rules.
* Even if you make the sale and get the money abroad, your fiscal obligations to Spain in connection with the sale do not change.
We recommend that you sell in cash, unless as a resident, you want to spread the income from the sale over several years for fiscal reasons. Payment terms make the matter complicated. You should not give title to the property in the buyers name before having received the total sales price. It is not wise to give the buyer, or his representative, a key and right of use of the property before he has paid completely. If he moves in and stops paying, you have to take him to court to get him out. On the other hand, the buyer may not have the full amount available, needing to sell another property or get a loan from the bank. He will want some guarantee for the deposit paid in the meantime.
On signing a private contract, you as the vendor, should insist on getting a non-refundable deposit of 5-10% for taking the property off the market. This is normal. If the buyer wishes to pay a larger amount when signing the contract, you can: have the 5-10% non-refundable deposit paid directly to you, and the balance paid into the clients account of a lawyer or bank with clear instructions that at contract completion (final signing at the notary's office) the balance from the lawyer/bank account be paid to you.
NEW NOTARIAL RULES:
According to the new rules, the notary now has the obligation to check the registration of the property being sold before the signing of the deed. Additionally, he must fax the new title deed immediately to the property register. If your property belongs to a community of owners, you must have the secretary/administrator prepare a certificate that there are no outstanding debts. This is good legislation, and vendor and buyer should make the notaries comply with their obligations.
PREPARING YOUR PROPERTY: MAINTENANCE:
In order to effectively market your property, it should be well maintained. If it has been vacant for a while, make sure it is cleaned and aired, all fittings function, the garden is tended, the swimming pool cleaned, and that damaged curtains or furniture be repaired or changed. A small investment in preparing the property may make the difference both in the time needed for the sale as well as the price obtained.
Prepare the papers. You should have copies of your title deed (escritura) and a "nota simple" from the property register ready to show to any interested buyers so that they can see you are still the owner of the property and that there are no outstanding debts related to the property. That paper is a very good selling point.
In addition, you must have the latest receipts, for the local rates (Impuesto de Bienes Inmuebles), for electricity, water and fees to the Community of Owners, if applicable.
If you are selling the property furnished, you must prepare a complete list of furniture and even photos of the most important pieces.
You may also decide to have an evaluation done on the property. This will give you a realistic idea of what price you can ask and will assist you in convincing a potential buyer. Such an evaluation can be done by specialised valuation firms, by a real estate agent, by a surveyor (aparejador) or architect. F.I.P.E. can assist you in finding such a surveyor.
The fiscal obligations for a foreigner selling his property in Spain are:
* make sure that the transfer taxes on the new title deed and the municipal Plus Valía tax is being paid.
* pay the local rates on the property up to the property transfer date.
* pay capital gains taxes on the sale.
We have explained this in detail in our Short Information on Capital Gains Taxes (also available from F.I.P.E.). It is very important for any vendor to read this Short-Information carefully and make the appropriate calculations
Your legal obligations are to give a clean title to the new buyer, to inform the town hall, the bank, the electric company, water board and your fiscal representative in Spain that you no longer own the property. The new buyer should be advised to contact the town hall, electric company, water board, etc. of his new ownership.
REAL MARKET VALUE MUST BE DECLARED:
you should be aware that Spanish law states that the real market value must be declared in any new escritura, and provides sanctions if they find a value has been declared at less than 80% of the real market value.
What is the market value? Not necessarily your sales price, since you can sell above or below the market value. The best thing to do is to make an evaluation of the property value. If you then declare no more than 20% less of the value, you should be safe.
CHANGE OF RESIDENCY:
Are you a resident not intending to buy another property? If you are a resident in Spain and do not intend to buy another property here after you sell your present home, it may be advisable to give up your residency before selling the property. You can do this by taking your residence permit to a police station with a foreigners department, and get a receipt for having returned it. You are then a non-resident and can act as such. You may not be permitted to take up the residency again before 3 years have passed.