Selling a property in Spain: a legal guide, taxes and procedures

Selling a property in Spain is an important decision. As well as finding a buyer and agreeing a price, you need to know which documents to prepare, what commitments you take on when you sign, and how much you will receive once costs and taxes have been deducted.

A timely legal review can detect problems before they delay the transaction or turn into a dispute. At MH Legal & Seguros we help you understand each stage and make decisions with a clear view of their consequences.

1. What to check before selling a property

Preparation starts by reviewing who can sell and what is being transferred. The purchase deed and the registry information allow you to check ownership and any registered charges, such as mortgages, attachments or usufructs.

The nota simple (simple note) is informational in nature. When the registry content must be formally certified, a registry certificate (certificación registral) should be requested.

It is also worth comparing the description of the property in the deed, the Land Registry and the Cadastre with its actual state. An extension, a swimming pool or a change of layout may require additional checks.

If there are several owners, a pending inheritance, a lease or family circumstances affecting the sale, it is preferable to resolve how the transaction will be formalised before accepting commitments with a buyer.

2. Sale price and the seller's costs

A well-founded commercial valuation helps you set a price consistent with the market. For this, you can rely on an estate agency that knows the area and comparable transactions.

When you appoint one, review the mandate: applicable fees and taxes, exclusivity, duration, cancellation conditions and when the right to the commission arises.

The advertised price is not the same as the net amount you will receive. Before negotiating, calculate the intermediation and advice costs, the taxes and, if there is a mortgage, the outstanding balance and the costs of its cancellation.

Legal fees are agreed with the client according to the scope of the service. There is no mandatory percentage of the sale price.

3. Documents needed to sell a property in Spain

The specific documentation depends on the property and on the regional and municipal regulations. Usually, it will be necessary to review:

• Your identity document and, where applicable, the NIE.
• The deed or title of acquisition and the updated registry information.
• The cadastral information and the IBI (Real Estate Tax) receipts.
• The valid and registered energy performance certificate, unless a statutory exception applies.
• The occupation or habitability title or document that may be required.
• The certificate of debts with the owners' community, where applicable.
• The mortgage documentation and the bank certificate of the outstanding balance, if any.
• Contracts and receipts for utilities.
• Documents relating to inheritances, powers of attorney, leases, works or circumstances affecting the transaction.

Not all autonomous communities use a cédula de habitabilidad (habitation certificate). Depending on the place and the circumstances, an occupation licence, a responsible declaration or another equivalent title may apply. For example, València provides for a responsible declaration for second and subsequent occupations.

In homes subject to horizontal ownership, it is also worth reviewing any approved special levies (derramas) and how they will be allocated between buyer and seller. Under the state law, the property is liable for certain community debts from the year of acquisition and the three previous calendar years; this check should not be left to the day of signing.

4. Offer, reservation and arras contract: what the seller should review

When you receive an offer, pay attention to the price and the other conditions: signing deadline, the buyer's financing, included furniture, delivery of possession and treatment of charges.

A reservation can create obligations. Its effects depend on what is agreed, so it is important to review the document before signing it or receiving money.

If a private contract with arras is agreed, it must be clear which type of arras is being entered into. When they are penitential (arras penitenciales), they allow withdrawal on the agreed terms: the buyer loses the amount paid and the seller returns double. Other arras arrangements can have different consequences and allow claims for performance or compensation.

There is also no general obligation to pay 10 % of the price: the amount is negotiated.

A well-prepared contract should regulate the deadlines, the financing conditions, the consequences of breach and what happens if a legal or documentary issue arises.

5. Taxes when selling a property in Spain

Capital gain: IRPF or IRNR

The sale may generate a capital gain. Its calculation requires reviewing the fiscal values of acquisition and transfer, the deductible costs and taxes and, where applicable, investments, improvements and depreciation.

If you are a tax resident in Spain, its taxation in the IRPF (personal income tax) and any applicable exemptions will be analysed. If you are a non-tax-resident and sell without a permanent establishment, the property gain is taxed, as a general rule, at 19 % under the IRNR (Non-Resident Income Tax). That percentage applies to the gain subject to tax, not to the total sale price.

3 % withholding when the seller is a non-resident

When the seller is a non-tax-resident, the buyer must, as a general rule, withhold and pay 3 % of the consideration corresponding to that seller via form 211 (modelo 211).

It is a payment on account against the seller's tax. The corresponding return is then filed to determine whether an amount remains to be paid or whether a refund of the excess withheld should be requested.

Tax residence must be checked: it does not depend solely on nationality.

Municipal capital gains tax (plusvalía municipal) when selling a property

The Tax on the Increase in the Value of Urban Land (Impuesto sobre el Incremento del Valor de los Terrenos de Naturaleza Urbana) is distinct from the tax on the capital gain. It affects urban land and its calculation depends on the regulations and the applicable municipal ordinance.

It is not calculated simply by comparing the old cadastral value with the current one. There is an objective method, and the actual increase may be applied when it is lower. If it is shown that there has been no increase in the value of the land, the transfer is not subject to the tax, although it must be declared and justified.

In a sale, the seller is normally the taxpayer. If the seller is a non-resident individual, the buyer acts as the taxpayer's substitute before the town hall.

6. Signing before a notary, mortgage cancellation and handover of keys

Before going to the notary, it is advisable to have agreed the content of the deed, the means of payment, the retentions, the cancellation of charges and the conditions of delivery.

If you have a mortgage, paying off the loan does not by itself remove the registered charge. Its registry cancellation, or the solution expressly agreed for the transaction, must also be arranged.

The deed will record the conditions of the sale. The handover of keys and possession must follow what was agreed; if it is deferred, that period should be expressly regulated.

Notarial involvement provides legality control and documentary security. Prior preparation lets you reach the signing with the particular questions of the property and the seller's interests already reviewed.

7. Formalities after selling a property

After signing, review the filing of the relevant tax returns, notification of the change of owner to the community, the utilities and the cancellation of direct debits.

Keep the deed, the proof of payment and the documentation of costs and taxes: they may be needed for your tax return or to respond to a later issue.

Legal advice to sell your property with MH Legal & Seguros

At MH Legal & Seguros we help you review the legal status of the property, prepare and negotiate the contracts and coordinate the formalisation of the sale. We explain the commitments you take on and the issues that must be resolved before signing.

Contact our team and tell us which property you want to sell and what stage the transaction is at.