Costs involved in the purchase of a Spanish property

Before putting your property for sale in Orihuela Costa, sometimes even before buying a property, especially if it is an investment, you will have all the cards in advance!

Here is the complete list of taxes and expenses that you must pay when selling a property in Costa Blanca:

Plusvalía Tax

Every seller is required to pay this tax (unless there is a loss on the sale, in which case they may try to avoid it). It is calculated based on the years or months you have owned the property multiplied by the cadastral value of the land. Even if you own an apartment, it will be applied proportionally to the land on which the development is located. Generally, it is not a very high expense, but it is important to keep in mind.

If you are a non-resident, normally, the buyer will withhold this amount from the purchase price. It will be paid on your behalf after the sale is completed.

IBI (Property Tax)

When a house is sold, the IBI for the current year must be paid by the owner up to the date of the sale. From the date of the deed of sale, the new owner will be responsible for paying the IBI for the property. It is important to consider this responsibility when calculating the costs associated with selling a house.

Community Expenses

It is important to ensure that community expenses are up to date and paid. Normally, at the time of signing the deed, the seller must provide the buyer with a community certificate certifying this.

Real Estate Agency Fees

If you choose to involve a professional real estate agency to sell your property in Orihuela Costa, feel free to contact us. Although it is not mandatory to have an agent, doing so properly can improve the chances and speed of the sale. In Orihuela Costa, the agent's fees in a sales process are borne by the seller, never by the buyer, and are generally agreed upon prior to listing the property for sale. It is essential to note that the agent, like a lawyer or other professional, must apply 21% VAT to the total amount when issuing their invoice.

Attorney Fees

Again, it is not essential to hire the services of an attorney during the sales process. Even if the buyer decides to have a lawyer to prevent any complications after the sale.

Mortgage Cancellation Costs

If there is a mortgage on the property, all costs and fees to cancel the mortgage are paid by the seller. This may include the bank's commission for early termination of the loan, notary and registration fees for the cancellation.

Energy Efficiency Certificate

The Energy Efficiency Certificate is a document that assesses and rates the energy efficiency of a building or dwelling, providing a rating on a scale of letters (from A to G) and recommendations for improving energy efficiency. This certificate is processed by a technical architect.

Habitability Certificate

This certificate certifies that the property meets the habitability requirements set by the City Council. Without it, the buyer will not be able to assume responsibility for public service contracts.

3% Withholding of the Sale Price

This is not a tax or a cost, but it is important to be aware of it to better understand the situation. This process applies only when the seller is a non-resident in Spain. According to the law, the buyer must withhold 3% of the purchase price at the notary's office and deposit this amount at the tax office in the seller's name after signing the deed. Subsequently, the seller can request the refund of this amount from the Tax Agency, which can take about 6 months. The money will be reimbursed to the seller's bank account, deducting any outstanding taxes, if any. Generally, if there was a gain on the sale, the income tax will be deducted directly from this withholding, often managed by the lawyers. To request the refund, it is necessary to wait at least one month after signing the deed, and then the seller has three months to submit the corresponding form to the Tax Agency to claim the refund of the money.

Generally, it is the buyer's lawyer who retains the 3% in their client's account and is responsible for depositing the money at the Tax Agency in the name of the seller. They have up to 30 days to manage this after completing the purchase. The property, now owned by the buyer, serves as a guarantee that this process is carried out correctly.