THE BIG MONEY QUESTION: How to sell a Spanish holiday home?
THE BIG MONEY QUESTION: I have a small holiday home in Spain that I have decided to sell – how do I go about it?
In our new series, we answer YOUR burning questions about money…
I have a small holiday home in Spain which I have decided to sell. How can I go about it? IC, Lincolnshire.
Ruth Jackson-Kirby responds: Selling a property can be stressful at the best of times, but add currency exchange and another country’s laws and it all gets even more complicated.
Fortunately, hundreds of thousands of Britons own property in Spain, so there is plenty of support for anyone wanting to sell.
For sale: Hundreds of thousands of Britons own property in Spain, so there is plenty of support for anyone wanting to sell
Peter Robinson, executive chairman of the Association of International Property Professionals (AIPP), says the good news is that you should get a quote with an agent fairly quickly as the market in Spain is strong at the moment and agents have weak stock levels.
“Just be careful who you choose or your property may not sell in the time you are looking for or may not be an enjoyable experience,” he adds.
The best way to find a good agent is to follow recommendations from people you know. If you can’t get a personal tip, be sure to contact several different agents and pick the one you think provides the best service.
Look for agents who have bought and sold properties for UK owners before.
Also check that your preferred agent is a member of a professional body such as the Agente de la Propiedad Inmobiliaria (API). Members are regulated and complaints procedures and liability insurance are in place to protect you. The AIPP also has a list of 180 agents specializing in the sale of properties internationally. Go to aipp.org.uk.
The sales commission can be around five percent, reflecting the higher costs of international marketing, typically in the UK, Netherlands, Belgium, Germany and Scandinavia.
Once you have an agent, make sure there is a clear written agreement outlining the fees you pay and any other fees.
You don’t have to have a lawyer, but it’s a good idea. Find one who speaks good English and they can handle the sale for you.
You can find a list of English-speaking Spanish lawyers on gov. uk/government/publications/spain-list-of-lawyers.
As you may remember when you bought your property, Spanish law requires you to have a notary. Their role is to check that all the documents for the sale are correct, to ensure that the taxes are paid and to register the sale with the Spanish Land Registry.
The notary is a neutral party and you must agree this with the buyer. There are thousands of notaries in Spain, and they work to a set fee schedule, so you don’t need to shop around – just look for someone with a good reputation.
Luckily for you, the buyer usually pays the notary fees as part of the sale price.
To facilitate the smooth running of your sale, pay all your documents immediately.
You will need to provide the title deeds to the property together with receipts proving that you have paid the local municipal property tax, details of any community statutes, an inventory of all furniture that will be included in the sale and copies of your utility bills.
The sales process is quite similar in the UK, but with one key difference. Once the contracts are signed, the buyer pays a deposit, usually 10% of the sale price. If the buyer withdraws, he loses his deposit; if you change your mind, you may be required to pay double the deposit as compensation.
Once the sales are done, you need to think about how you are going to transfer the euros you received back to the UK and into pounds.
“Be careful who you use to transfer the sale proceeds to, your bank will give you a terrible conversion rate,” says Robinson.
“We recommend that you use an independent and regulated currency provider.”
Finally, don’t forget the tax bill. Spain has a capital gains tax that will need to be paid.
In addition, there is a ‘plusvalia tax’ on any increase in the value of the land your home is on, paid to your local Spanish town hall.
The sale may also be subject to capital gains tax in the UK, but the UK and Spain have a double taxation agreement so you only have to pay tax in one country .
If you are a UK resident, Revenue & Customs will generally give you a credit for any tax you have paid in Spain.
Your notary will ensure that you pay any tax due in Spain. Your solicitor should be able to help you navigate if UK tax is due.