When you sell a property and are not resident in Spain for tax purposes, the buyer is required by law to withhold 3% of the sale price and pay this to the Spanish tax authorities as an advance on the seller’s capital gains tax. This is a guarantee for the tax authorities that the tax will be paid.

If you sell at a loss, you can apply to have the amount refunded. The deadline for such an application is 3 months after the tax has been paid. However, if you have sold at a profit, you are obliged to settle with the tax authorities after the sale.

What can you deduct?

The gain is calculated on the basis of what the property cost when you bought it and how much you sold it for. You can deduct costs in connection with the purchase (e.g. tax, notary and property registry fees) and costs associated with the sale (e.g. estate agent’s fees and lawyer). You can also deduct some costs for upgrading the property. Note that original invoices issued in the seller’s name must be presented.

If the sale does not result in any gain, or if the gain is less than 3% of the sales price, the seller can apply for a refund of the amount paid. The requirement is that the seller has complied with their tax obligations to Spain.

It is everyone’s duty to familiarize themselves with the legal rules that apply where they have bought a property. You can’t use as an excuse that you’re a foreigner and didn’t know what rules applied as an excuse.

PLUSVALIA

In addition to the capital gains tax, the seller is obliged to pay a municipal tax on the increase in value of the property. This tax is known as “plusvalia” and varies from municipality to municipality.

It is the municipality that calculates this tax, but the estate agent will be able to estimate it for you if he has all the necessary information.

Good luck with your sale. If you need help – contact us.

Owning a property in Spain entails a series of expenses that go beyond the purchase price. These include taxes, notary fees, registry fees, gestoría, and possible mortgage and maintenance costs. Total costs can vary significantly depending on the location, the type of property (new or used) and the value of the property.

IBI (Real Estate Tax).

Real Estate Tax is a direct tax of a real nature levied on the value of real estate, the taxable event of which is constituted by the ownership of rustic, urban or special real estate located in the respective municipal district, of an administrative concession on the real estate itself or on the public services to which it is attached, or of a surface right, or of a real right of usufruct, or of the right of ownership.
*** Translated with www.DeepL.com/Translator (free version) ***

In the province of Alicante, IBI is paid through SUMA.

Es habitual pagar el IBI mediante domiciliación bancaria.

If you do not have a direct debit bill and you have received an IBI payment notice by post, you can pay by card on the SUMA website. You can also visit your nearest SUMA office and pay by card.

Municipal solid waste tax

As the name suggests, this is a fee for the removal of waste. The amount and deadline for payment vary from municipality to municipality.

The tax rate will consist of a fixed amount, per unit of premises or per building use, which will be determined according to the nature and purpose of the properties.

Tax for non-resident owners

Click HERE for more information.

Community of owners

A community of owners, also known as a community of neighbours, is the legal entity that groups together the owners of dwellings or premises in a building or residential complex. Its main function is to manage and maintain the common areas, such as staircases, lifts, gardens, etc. This community is governed by the Horizontal Property Law and, in some cases, by its own statutes.

Owners are obliged to contribute to the maintenance and upkeep of the common areas, according to their share of ownership. They must also respect the established rules of coexistence and allow access to their dwellings to carry out necessary works in the common areas.

Home insurance

There are countless insurance companies in Spain. We recommend that you contact an insurance agent who speaks your language and with whom you can communicate.

Read the general conditions of the insurance to see what is covered and what is excluded. Some companies require notification if the home is unoccupied for more than 30 days or if it is rented. If you have items that individually have a high value, most require this to be specified in the policy to be covered.

It is crucial to ensure that the value for which an asset is insured is equal to or greater than its actual value. Underinsurance occurs when the value declared in the policy is lower than the actual value of the insured property, which can lead to underinsurance in the event of a claim.

When taking out insurance, the agent and the company are as important, if not more important, than the price itself.

Current expenditure

Price of electricity:

The price of electricity in the regulated market (PVPC) varies according to supply and demand, and is set by the hour. You can check the price of electricity per hour on sites such as Naturgy. You can also find information about the cheapest electricity companies on sites such as Papernest.

Water:

You should contact the local council to find out who the water supplier is: whether it is the local council itself, or a public or private water management company.

Gas:

For further details on gas distribution in Spain, please refer to the following link: How to find out who my gas supplier is – Nedgia. Compare and choose the gas tariff that best suits your needs.

If you are not a tax resident, 3% of the deed value will be withheld and paid to the tax office. If you have sold at a loss and complied with your tax obligations, you can apply to have this refunded. However, if you have made a profit, the capital gains tax in the Valencia region is 19%, and any difference must be paid.

If you are a tax resident over the age of 65 and have lived in the property as your permanent residence for more than three years, different rules apply. We recommend that you contact a professional advisor and tax expert to protect your interests.
If you have a mortgage on your property, check with your bank to find out how much it will cost to pay off the loan and delete it from the property register.

Finally, the seller must present a valid energy certificate (and in some places an updated occupancy certificate is required) before going to the notary to transfer ownership.

So, the seller must pay:

• Real estate agencies fee
• Tax to the municipality
• Capital gains tax
• Cancellation of loans and deletion of encumbrances in the property register (if there is a loan)
• 3% withholding tax if the seller is not a tax resident
• Energy certification
• Valid occupancy certificate (not required everywhere)

Regardless of whether you are selling privately or using a real estate agent, we recommend that you use a lawyer with insight into Spanish property and tax law to protect your interests. The cost is low compared to the price of the property, and it is an insurance to avoid problems after the change of ownership.

A separate inheritance tax must always be carried out in Spain for assets left behind by the deceased, be it real estate, vehicles or bank accounts.

An official deed of inheritance, stating the deceased’s assets and who the heirs are, must be signed. After the respective taxes and fees have been paid, this is presented to the property registry to be registered. Only when the inheritance agreement has been approved can property and/or vehicles be sold and bank accounts settled.

What happens to bank accounts in Spain when the account holder dies?

To settle bank accounts, these must be included in the inheritance, and the respective taxes and fees paid. Balances are based on the date of death.

If the accounts are only used by the deceased, they will be blocked.

In cases where there are two account holders, the bank will generally block half of the outstanding balance on the date of death until the estate has been settled and the rightful heirs have been identified.

Fixed assignments will continue to be serviced, known in Spain as “domiciliaciones”.

Can I sell the deceased’s car?

The same rule applies here as for property. Before the deceased’s car can be sold, it must be included in the inheritance settlement.

use a lawyer – it’s affordable insurance

We recommend that you seek legal assistance from a skilled lawyer who knows both your countries and Spanish law. It can save you a lot of headaches.

[Photo: ©pixabay.com]

Some people have made all the arrangements in advance of their death and given instructions on how they want the funeral to be organized. This makes it easier for the bereaved, and you don’t have to decide on cremation, burial, burial site, ceremony, etc.

Here, as elsewhere in the world, it is the funeral parlour that takes care of the practicalities, and they are available 365 days a year, around the clock. They will arrange the necessary authorisations and documents for you to take the deceased with you to your home country, if that’s what you want.

Insurance companies, embassies and funeral parlours are important supporters if you become the next of kin in the event of death abroad.

If the deceased was on holiday, the insurance company is an important partner, provided that the deceased has travel insurance. Make sure that the travel insurance covers these expenses.

The first thing you should do is contact your insurance company and the nearest embassy or consulate.

The insurance company will take care of the practicalities of handling the repatriation of the coffin, and the consulate will issue the necessary documents for the transport of the coffin.

If the deceased does not have insurance, it will be up to the next of kin to pay the costs of repatriating the coffin, cremation and repatriation of the urn, or local burial.

Should you choose to have the deceased returned to your home country and the deceased is cremated, there are no costs associated with having the urn brought home. However, if you wish to have the deceased repatriated and there is no insurance to cover this, it can be a costly affair. Airlines usually charge four times the normal ticket price to transport a coffin.

The Foreign Service does not cover any expenses in connection with citizens who die abroad.

In cases where there are no relatives who can organize repatriation of the deceased or burial locally, the deceased will be buried on site at the respective country’s expense and in accordance with its laws and practices.

In the event of all deaths, the consulates submit a “Notification of death” to the Tax Administration. This is a prerequisite for the death to be registered in the population register in the home country.

If the death occurs in a hospital, you may find that the funeral home provides a form to be signed as soon as the deceased has breathed their last. Our advice is not to sign anything you don’t understand.

It is common for hospitals to have agreements with funeral parlours to collect the deceased. However, you can choose the funeral parlour you want to use for the rest of the process. Therefore, don’t sign any paperwork at the hospital or hand over your passport to the deceased. Death is a business.

If an unexpected death occurs outside a hospital, a doctor must always be contacted to confirm the death. Call 112 and ask for an English-speaking doctor. If the doctor cannot determine the cause of death, the deceased will be sent for an autopsy.

The doctor signs a death certificate and notifies the undertaker, who the family wants to take care of all the practical aspects of the funeral. It is the undertaker who contacts the consulate and often also contacts the priest in the case of deaths of permanent residents in Spain. The consulate reports the death to the Ministry of Foreign Affairs, and the deceased is at the same time reported as deceased in the consulate’s register of permanently resident foreign citizens. It is therefore an advantage to be registered in the consulate’s register and to keep this updated with address and telephone number. If you are single and something happens to you, the Ministry of Foreign Affairs will contact relatives in the home country.

Relatives might also receive help from the local Church, which can assist with memorial gatherings and memorial services.

The funeral director then ensures that the coffin is placed in the church. After the ceremony, the coffin is taken away and the relatives and priest follow it to either the cemetery or the crematorium.

If the deceased is to be buried in Spain, it will be in the cemetery in the area where the deceased lived.

We recommend that you ask for a price before accepting a funeral company. There can be a big difference in price for the same services, and you can save a lot by enquiring in advance. It’s not uncommon for the amounts involved to make it a major challenge for the bereaved to cope with the expense.

We have checked with the Tanatorium in Villajoyosa, and have been quoted a price of €3,340 for a basic package. This includes coffin, wreath, ceremony at the tanatorium, and storage for 5 days. If you want cremation, the price is €4103. If you want to be buried in Spain and want a gravestone, this costs from €600 and upwards. Prices were obtained in 2018.

Here, you can also buy the service in advance at a fixed price. Something that will significantly ease the situation for the bereaved.

This shouldn’t be a taboo subject. It’s a part of life, and sooner or later we all get there!

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