FAQ

No. In Spain you are not required to hire a real estate agency to carry out purchase and sale transactions. It is the seller’s or buyer’s personal decision, depending on their needs. However, we recommend you to consider all the advantages associated with these qualified professionals. Real estate agents know the market well, will assist you with sales strategies and negotiating skills, and will bring lots of potential buyers to see your property.

In the event that a real estate agent is involved,  the seller is responsible for the payment of his/her commission fees, which usually range between 5% and 7% of the sale price.

It is a document issued by a qualified technician that indicates energy consumption, CO₂ emissions, and the energy efficiency rating of a property, as well as recommendations for possible actions, technically feasible, to improve said efficiency.

The owner or developer is required to have an energy efficiency certificate for new construction homes or commercial spaces and for those that are to be sold or rented. No energy certificate is required for garages or storage rooms.

This certificate is valid for ten years, except when the energy rating is G (the lowest possible), in which case it is five years. Its cost ranges between €150 and €300 depending on the surface of the property.

It depends. The private sales contract is a binding agreement, that is, once signed, the buyer and the seller are obliged to comply with it.

Typically, the so-called “down payment” (arras in Spanish) is established in the contract, i.e., a part of the price is paid to ensure that both the seller and the buyer fulfill the obligation acquired (that is, to sell and to buy the property, respectively). The type of deposit determines the consequences that non-compliance has for each one of the parties. In general, if the seller backs out, they shall be obliged to return double the amount received. This means that if, for example, the deposit was 20,000 euros, the seller should return 40,000 euros to the buyer.

Another unlikely option is that the buyer accepts the unilateral cancellation by the seller, but even so, they will still have the option of filing a lawsuit to recover the expenses that the failed operation has entailed (legal fees, technical reports, travel costs). And finally, the buyer can also decide to force the sale, which would drag you as the seller into a long legal process. If the buyer were to win the lawsuit in court, you would be legally bound to sell the property to him/her.

First of all, you should check in your property deed whether the parking space your neighbor is interested in buying appears as an independent property or as an “inseparable annex” to the apartment. If it is registered as an independent property in the Land Registry, it can be sold separately without any problem. However, if it is an inseparable annex to the home, it shall be considered —as its name indicates— a part of it, and it can only be sold jointly with the apartment, as a whole.

In general, the costs that the seller shall be responsible for are the following:

• Commission fees of the real estate agent

As previously indicated, there is no obligation to hire a real estate agency to carry out the transaction, but, if an agent is involved, his/her commission fee shall be borne by the seller. These fees generally range between 5% and 7% of the sale price.

• Tax on the Increase in the Value of Urban Land (“Plusvalía”)

It is a municipal tax adopted on the basis of the increase in value of the land compared to the moment in which the property was acquired.

• Capital Gains Tax

The gain or loss obtained with the transfer shall be stated when filing the annual tax report on the income of natural persons.

However, if the seller does not reside in Spain for tax purposes, a 3% of the sale price shall be withheld automatically upon signing the deed. This amount shall be paid to the Public Treasury as a Non-Resident Income Tax. Non-residents in Spain whose country of tax residence is a Member State of the EU, Iceland, Norway, or Liechtenstein are subject to the payment of 19% of the profit obtained from the sale. In the case of other States, the rate applicable to the gain is 24%. 

• Certificate of Energy Efficiency (in the case of homes or commercial spaces)

It is a certificate issued by a qualified technician that measures the energy consumption and CO₂ emissions of a property in order to know if it meets minimum energy efficiency. Its cost ranges between €150 and €300, depending on the surface area.

• Mortgage cancellation fees

If the property is encumbered with a mortgage, this should be canceled prior to the sale or simultaneously. The seller shall pay the bank commission for early repayment and any other expenses related to the deed of cancellation of the loan and the lifting of the charges in the Land Registry, as well as fees of the paralegal in charge of these procedures.

• Legal fees

Invoice for professional legal services payable to the lawyer hired to carry out the property sale procedure. In general, legal fees amount to 1% of the sale price, plus applicable VAT. At Real(i)ty & Law, a minimum fee of 2000 euros plus VAT shall be applied in the event that 1% of the sale price is less than this amount.

Of course, the property must be free of debts at the time of sale, so that, if there are any, the buyer may withhold from the seller the amounts necessary to settle them.

Yes, that is correct. The Tax Authorities consider this withholding a payment on account of your tax obligations in Spain. However, you can request the return of said amount and, if you can prove using the proper documentation that the sale has not actually generated any profit, the Treasury should proceed to return the withholding.

The following expenses can be deducted:

• Notary fees
• Land Registry fees
• Law agent fees
• Legal fees
• VAT paid at the time of purchase
• Transfer Tax or Stamp Duties
• Real estate agency commission
• Comprehensive remodeling of the housing unit
• Plusvalía Tax
• Energy efficiency certificate

You only need to sign a new will before a notary public in which you state the new provisions. This means that a person can make as many wills as they want. The valid will shall always be the one granted last.

No. In Spain two or more people can not sign a will jointly, whether they do so for mutual benefit or for a third party.

Neither shall a will that two or more Spanish citizens grant jointly abroad be valid in Spain, even when the laws of the given country allow it.

Additionally, a will is a very intimate act –and no one except for the person involved can grant it. This means that the signing of a will cannot be delegated to anyone or carried out through a representative.

Powers of attorney cease to be valid at the time the person who granted them dies, so when your father died, the power of attorney ceased to have effect.

Keep in mind that a bank account is a deposit contract, so the bank is obliged to guard the funds that are in it. The bank can only transfer said funds to those who prove to be the “new owners” of the account, that is, the heirs. To that effect, banks usually require a copy of the deed of acceptance of inheritance and proof of submission of inheritance tax.

Dying without a will does not prevent heirs from receiving the assets that correspond to them. Heirs have the right to receive the assets of the inheritance whether or not there is a will.

If it is verified by the Spanish Registry of Last Wills that in fact the deceased person did not grant a will, anyone with a legitimate interest may request a declaration of intestate heirs, which shall be processed before a notary. The notary will draw up an act in which he/she declares who has the status of heir. Then, the process of partition (distribution) and adjudication of the assets shall be carried out.

It is important to note that the absence of a will can leave the widowed spouse in a delicate situation. The reason is that, in Spain, the legal heirs are in this order:

1. The descendants (children, grandchildren, and so on)
2. The ancestors (parents and grandparents)
3. The spouse
4. Siblings and nephews and nieces
5. Collaterals up to the fourth degree
6. The Spanish State

This means that, in the absence of a will, the above mentioned order should be strictly enforced. That means that a great-grandchild could inherit before the husband or wife of the deceased, and that the assets that the widowed spouse would receive would be significantly less than what they would otherwise receive in the event of having a will. If there are descendants, the law establishes for the widowed spouse only life usufruct (use and enjoyment for life) of one third of the inheritance. If there are no descendants, but ascendants, the widow or widower shall have the right to inherit the usufruct of half of the inheritance.

A will is a document that natural persons grant in life in which they name their heirs and establish how they wish their assets to be distributed after their death.

The declaration of heirs, on the other hand, is a document that is formalized before a notary and that is intended to determine who are the heirs of a person who died without having made a will or whose will was annulled. Thus, the declaration of heirs is carried out after the death and is collected in a notarial deed that indicates who are the relatives with the right to inherit.

Yes, a will granted abroad can take effect in Spain if specific requirements established by the rules of private international law are met. In the same way, a will granted by a foreign citizen in Spain regarding assets existing in another country can also be valid in that country if these rules are followed.

When an immigration element or some type of international connection is included in a succession, it is extremely important that the will be signed before a notary and that it includes a clause to express choice of the applicable law. That is, the person who grants the will chooses which law shall govern their inheritance: the law of his/her place of residence or the law of his/her nationality.

It is possible, but only under exceptional circumstances. Our Common Law establishes that a part of the inheritance, the so-called “legitimate”, must necessarily go to the son(s)/daughter(s) or descendants.

Some of the causes of disinheritance of a child set forth by law are the following:

– When the child abandons the parent and denies him/her food

– When the child mistreats the parent physically or psychologically

– When the child has been sentenced by final judgement for attempting on the parent’s life, or has been convicted of a serious criminal offence for causing injury or exercising violence against their parent, spouse or partner, or ascendants or descendants.

In the same way, children can also disinherit their parents when the parents have abandoned, prostituted or corrupted them; when they have lost parental authority by court order; when they have been denied support, or if one parent has made an attempt on the life of the other [parent].

No. Acceptance of an inheritance is a voluntary and free act. If you do not wish to accept it, for whatever reasons, you can refuse it. In order to do so, you must go to a notary and sign a deed in which you express your voluntary renounce.

Once you renounce the inheritance, the decision shall be generally irrevocable.

As established by our Civil Code, heirs are liable for the debts of the inheritance not only with its assets, but also with their own assets. To that end, in the event that there are debts and you ignore whether or not the inheritance assets are enough to settle them, it is recommended to accept the inheritance “for the benefit of inventory.” Thus, as heir, you shall only be liable for the debts of the deceased to the extent of the value of the inherited assets, so that your own assets shall never be compromised.

Any heir whose partitioning is hindered by another heir has the possibility to visit a notary public so that he/she tries to “unblock” the matter to a certain extent.

A notification shall be sent by the notary to the hesitant heir, who then will have 30 days to decide whether to accept his part of the inheritance or waive it. In addition, the notary will warn him that, in the event he does not express his decision within that time, it shall be assumed that the inheritance has been accepted.

According to the Spanish Non-Resident Income Tax Law, natural persons are considered to have their regular place of residence in Spain when any of the following circumstances applies:

• The person is in Spain for more than 183 days during a calendar year. In order to determine the period of stay, sporadic absences are taken into account, except those when the tax residency in another country is proven. 

• The person’s spouse (not legally separated) and under-age dependent children reside in Spain, except when proven otherwise. 

• The main base, headquarters, or core of the person’s economic activities is located in Spain, directly or indirectly.

In other words, only one of the three conditions above must be met for the person to be considered a resident in Spain. For tax purposes, the main consequence of being a resident is that taxes must be paid in Spain on the individual’s worldwide income –that is, on all salaries, pensions, benefits, property income, dividends from any source, or capital income from the sale of properties, regardless of the place where these occurred and the country of residence of the payer.

Although each country has its own definition of tax residence, in general terms you are considered a tax resident in the country where you spend more than 6 months in a calendar year. Accordingly, the Spanish Tax Agency considers that a natural person is subject to paying taxes in this country as a resident if he/she is in our territory for more than 183 days between January 1 and December 31, the period that comprises the tax year in Spain. Thus, if you live in Spain for more than 183 days each year, regardless of whether they are non-consecutive periods, you shall be required to pay taxes here on your worldwide income.

Under some circumstances, two countries may consider you a tax resident at the same time. Fortunately, most States have agreements to avoid double taxation –these agreements keep the taxpayer from paying twice for the same taxable, and usually include regulations to determine in which one of the two countries you qualify as a resident.

If the tax agreement does not offer a solution for your specific case or your situation is particularly complex, it is advisable to contact the tax authorities of each country for clarification.

The main reason is that the State has delegated to the Autonomous Communities certain tax issues, such as those applicable to the purchase of a property. Therefore, the different Autonomous Communities have the authority to determine the rates, reductions[deductions] in the taxable base, and bonuses applicable to each one of the taxes. Hence, the tax burden is higher or lower depending on which Autonomous Community the property is located in.

Examples of tax collections transferred to the Autonomous Communities are Transfer Tax, Stamp Duties, Inheritance and Donations Tax, and Wealth Tax, all of them related to being the owner of a property or having a right to it.

Let us imagine, for instance, that we are going to acquire a newly built property (new construction). Being a newly built home, the taxes applicable to the purchase will be VAT (Value Added Tax) and Stamp Duties.

VAT is a State tax that is levied on the consumption of goods or services and that is based on the products or services themselves, regardless of who purchases them and/or the place where such goods or services are delivered.

When it comes to the acquisition of real estate, in general terms VAT currently amounts to 10% of the purchase price. This percentage, as previously indicated, is the same throughout the national territory.

However, Stamp Duties is a tax assigned to the Autonomous Communities, so the tax amount to be paid will depend on the Community in which the property is located.

If the property to acquire is a second-hand home, we would not be subject to payment of VAT and Stamp Duties, but Transfer Tax. And the Transfer Tax rate is also determined by each Autonomous Community, so it will be different depending on the location of the dwelling.

Hence, the geographical location of the property is a determining factor in fiscal and tax matters.

The owner of a property in Spain shall pay several taxes and cover a number of expenses on a regular basis.

• Personal Income Tax

Annual tax applicable only to individuals who are residents in Spain for tax purposes. The primary home is not taxed in the Personal Income Tax, but a second residence or vacation home is.

• Non Resident Income Tax

Annual tax applied to individuals who do not reside in Spain for tax purposes. This tax is levied on income obtained by way of leasing, in the event that the property is rented, or for own use by its owners as a second residence.

• Wealth Tax

a) Individuals whose place of residence is on Spanish territory

These taxpayers must declare all property or rights of financial nature  owned on December 31, regardless of where the property is located or where they can exercise their rights.

b) Individuals whose place of residence is not in Spain but own property or rights that are located, can be exercised, or have to be fulfilled on Spanish territory

These taxpayers must declare only the property and rights they own on December 31, only if these are located, can be exercised, or have to be fulfilled on Spanish territory.

In both cases, any charges and levies related to such property or rights, as well as debts on capital invested in them, can be deducted when calculating Wealth Tax.

Wealth Tax is managed by the Autonomous Communities, who can apply reductions in the exempt minimum (which is currently €700,000), modify the rate, and approve deductions and bonuses in the tax rate. Such is the case of the Community of Andalusia and the Community of Madrid, where there is a 100% discount. That is, no Wealth Tax needs to be paid.

• Local Rates/Property Tax (IBI, by its Spanish initials)

It is a municipal tax calculated from the cadastral value of the property and payable on an annual basis.

• Rubbish Collection Fees

Paid to the Town Hall of the municipality where the property is located for providing solid urban waste collection and treatment services.

• Owners Association Fees

The owners of homes, plots, garages, storage rooms, or other types of commercial spaces that are part of an owners association shall be subject to the regular payment of fees aimed to cover general expenses of said community. Fees will be calculated according to the coefficient of participation of each owner.

• Home Insurance Policy

Owners should take out a home insurance policy for their property that covers contingencies that may affect both the property and its contents. Contrary to what is generally believed, the insurance policy of the Owners Association only offers coverage for accidents that may occur in the common areas shared by the owners of the building or housing development, but it does not cover those that take place inside the homes, or any damages that owners may cause to third parties.