I have a small holiday home in Spain that I have decided to sell, how do I go about doing this and what do I need to know?
I have a small holiday home in Spain that I have decided to sell. How do I go about it? IC, Lincolnshire.
For Sale: Hundreds of thousands of Brits own property in Spain, so there is plenty of support for anyone wanting to sell
Ruth Jackson Kirby replied: Selling real estate can be stressful in the best of circumstances, but add in the currency exchange and other country’s laws and everything gets even more complicated.
Fortunately, hundreds of thousands of Brits own property in Spain, so there is plenty of support for anyone wanting to sell.
The good news is that you should get listed with an agent pretty quickly because the market in Spain is strong at the moment and agents have low levels of stock, says Peter Robinson, CEO of the Association of International Property Professionals (AIPP).
“Just be careful who you choose, or else your property may not sell in the time frame you’re looking for or be an enjoyable experience,” he adds.
How to save on foreign money transfers
If you are sending money abroad or converting cash from foreign currencies to pounds sterling, it pays not to use your bank.
Banks usually load currency exchange rates in their favour, and they can charge a percentage fee on top which eats up a significant amount of your money.
The best way to save money is to use a specialized currency exchange service.
This is Money has partnered with FXCompared to help readers find the best rates on money transfers.
> Use our tool to compare money transfer exchange rates
The best way to find a good agent is through recommendations from people you know. If you can’t get personal advice, make sure you contact a few different agents, and choose the one you feel offers the best service.
Look for agents who have bought and sold properties to UK owners before.
Also check that your preferred agent is a member of a professional body such as Agente de la Propiedad Inmobiliaria (API). Members are regulated and there is a complaints procedure and liability insurance to protect you. AIPP also has a list of 180 agents that specialize in selling real estate internationally. Go to aipp.org.uk.
Sales commission can be around five percent, reflecting the higher costs of marketing internationally, typically in the UK, the Netherlands, Belgium, Germany and Scandinavia.
Once you have an agent, make sure you have a clear written agreement that covers the fees you pay and any other fees.
You don’t have to have a lawyer, but it’s a good idea. Find someone who speaks good English and can take care of the sale for you.
You can find a list of English-speaking Spanish lawyers at gov. UK / Government / Publications / List of lawyers in Spain.
As you no doubt remember when you bought your property, Spanish law requires that you have a notary. Their role is to validate all paperwork for the sale, ensure that taxes are paid and that the sale is registered with the Spanish Land Registry.
The notary is a neutral party, and you must agree with the buyer. There are thousands of notaries in Spain, and they operate with a set price tag, so you don’t need to shop around – just find one with a good reputation.
Fortunately for you, the buyer usually pays the notary fee as part of the sale price.
To help the sale go through smoothly, get all your paperwork in order right away.
You will need to provide title deeds for the property as well as receipts to show you have paid local municipal property tax, details of any community laws, an inventory of any furniture that will be included in the sale and copies of utility bills.
The sale process is somewhat similar to the UK, but with one major difference. Once the contracts are signed, the buyer pays a deposit—usually 10 percent of the sale price. If the buyer withdraws, they lose their deposit; If you change your mind, you may be liable to pay double the deposit as compensation.
Once you complete the sale, you need to think about how to convert the Euros you received back into the UK and into the British Pounds.
“Be careful who you use to transfer the proceeds of the sale—your bank will give you a terrible conversion rate,” says Robinson.
We recommend using an independent and regulated currency provider.
Finally, don’t forget about the tax bill. Spain has a capital gains tax that must be paid.
In addition, there is a “plusvalia tax” on any increase in the value of the land on which your home is located, paid to the local city council in Spain.
The sale may be subject to capital gains tax in the UK as well, but the UK and Spain have a double taxation agreement so you only have to pay the tax in one country.
If you are based in the UK, Revenue and Customs will generally give you a credit for any tax you paid in Spain.
Your notary will ensure that any tax due in Spain is paid. Your solicitor should be able to help you navigate if any UK taxes are due.