Our professional fees are 5% + I.G.I.C. of the sale price, or a minimum of 5.000€ + I.G.I.C. for any sales price under 100.000€, and for that we offer a total service from start of promotion to completion of sale; there are no hidden costs relative to our service to the vendor.
The service provided to the vendor is:
• Marketing as summarized in the following section.
• Accompanying potential purchasers to all viewing appointments.
• Accompanying Bank’s valuer in event of mortgage application for purchaser
• Preparation of purchase option contract in Spanish with English or German translation.
• All of the preparatory work for signing at Notary office, including initial title search, booking sworn interpreter etc., co-ordination of attendees at Notary office (mortgage cancellation, etc.
• After completion, name change for services, such as Telephone, water, electricity, and at ‘catastro’ (the rates office).
OUR OFFICE: A very important source of purchasers are repeat clients, people arriving to us through personal recommendation, and of course ‘walk-ins’ to our office; our prime corner location on the main entrance to Costa Teguise ensures high visibility and easy access for these clients.
PRINT MEDIA: Freedom for Sale property magazine on a regular basis and periodically in other local magazines such as the 37º, and when appropriate in other publications such as Thomas Cook Inflight Magazine, and Holidays Abroad.
• Our own web site (www.location-lanzarote.com) which has been developed to provide all of the pertinent information in as simple a manner with as few keystrokes as possible.
• We advertise most of our properties on the Freedom for sale Website and select properties on other websites.
In order to facilitate the sale of our listed properties, we of course provide assistance at no additional cost to the purchasers relative to opening bank accounts, obtaining mortgages, information regarding costs etc, and the general paperwork involved in purchasing a property in Lanzarote. Effectively, they too get a total service, however, as our fee is generally agreed with and paid by the vendor, we always advise the purchaser to use an independent solicitor.
CAPITAL GAIN TAX:
In terms of selling your apartment and the resulting tax implications, we can prepare a rough estimate for you, although for accurate up-to-date information on your tax responsibilities, during ownership, and on the sale of a property, you can contact your Gestor. You can find contact details for some recommended Gestors on our website under the Professional Contacts section within the ‘CONTACTS’ tab, OR you go directly to the the Spanish tax authority by following this direct link to http://www.agenciatributaria.es/AEAT.internet/Inicio_en_GB/English/Non_residents
As a general guide, capital gain tax where applicable, is applied at a rate of 21% on the gain, for residents 21% on the first 5,000€ and 24% thereafter (although there are allowances for inflation, purchase and improvement costs, and certain exemptions, etc). This payment is made in two stages:
1. At the signing of the public deeds and when the vendor is not a Fiscal (Tax) Resident, 3% of the purchase price as per the title deeds will be retained (form 211) and within one month must be paid to the Spanish public tax authorities (Tesorería Publica). This represents a payment on account of the capital gain tax. The purchaser’s representative will lodge this with the tax office (Hacienda) within 30 days of signing the deeds. After completion of the sale a balancing tax return (form 212) should be submitted by you, or more usually on your behalf by your local accountant / gestor (i.e. agents who undertake business with government departments, insurance companies, etc).
2. After that lodgment has been filed the vendor should have a ‘gestor’, specializing in this kind of administration, prepare and file a balancing tax return to establish whether the tax office owes the vendor a refund, or vice versa.
Fiscal Residents pay capital gain tax.
A special reference should be made to this type of local or municipal capital gains tax on property in Spain – known as the Plusvalía.
What is the plusvalia tax in Spain?
The plusvalía is a local (municipal) tax charged by the town hall on properties when they are sold. It is calculated on the rateable value of property and the number of years that have passed since the property was last changed hands. The objective is to tax the increase in the value of the land on which the property stands, some of which is due to improvements to the area carried out by the local government and the community at large.
The base for this tax is the "valor catastral" (an administrative value that is usually lower than the market value, sometimes considerably so) of the property. The amount due in tax will depend on how long the seller has owned the property: the longer the period, the higher the amount of tax.
Who pays the plusvalia tax in Spain?
In theory the vendor, though both parties are free to negotiate who pays it. During the boom, when vendors had all the negotiating power, it was reasonably common for buyers to agree to pay it, especially in areas like Andalucia. However, since boom turned to bust in 2008, any vendor lucky enough to find a buyer is almost certainly going to have to pay the plusvalía municipal tax, as buyers are now in the stronger negotiating position.
How do you pay the plusvalia tax in Spain?
You have 30 days from the date of sale to pay the plusvalia to the town hall.
If you (the vendor), are not resident in Spain (whatever your nationality), the buyer may insist on withholding funds to pay the plusvalía on your behalf, as the new owner would become liable for the plusvalía in the event of non-payment (i.e. if a non- resident does a runner without paying)
Exception in the event that the property sold is their primary residence, in which case any of the funds that are re-invested in a replacement primary residence within a 2 year period, will be free of capital gain tax. However, you will only be entitled to this exemption if you can provide an official Certificate of Fiscal Residency from the tax authority at the signing of the public deeds.
Again, your Gestor will guide you through this process but you should set this process in motion in a timely manner as it can take a little time.
The other cost that arises is in the region of €100 for a sworn interpreter to translate the deeds at the notary office; this is a cost that could be shared between vendor and purchaser in the case both speak the same language and that neither speaks Spanish.
For accurate up-to-date information on your tax responsibilities, during ownership, and on the sale of a property, you can contact your Gestor. You will also find contact details for some recommended gestors on our website under the Professional Contacts section within the ‘CONTACTS’ tab, OR you can find tax information on by following this direct link to the Spanish tax authority http://www.agenciatributaria.es/AEAT.internet/Inicio_en_GB/English/Non_residents
Vendors will need to provide the following documentation:
At time of listing your property for sale
• Either a simple copy of your deeds, or else the registration details (in particular the FINCA number).
• Nº Fijo and Catastral reference which can be obtained from a copy of rates/IBIU receipt.
For completion of the sale before notary public
• A certificate of ENERTY EFFICENCY as now required by EU law. The certificate will be valid for 10 years so you can arrange for inspection at any time to suit you before going to the notary office. Your agent should be able to assist you in arranging this with the appropriate registered professional.
• Your original TITLE DEEDS (ESCRITURA)
• IF your current passports are different to those detailed in your title deeds; a certificate from the UK home office confirming your current and past passports are for one and the same person.
• ORIGINAL certificate of community fees paid in full, signed by the president/administrator of the community of owners. Where water, electricity and garbage collection are included in the community/maintenance fees, the certificate should specify the status of payments on all items.
• ORIGINAL receipts for the last 2 year payments of rates (IBI) – it should be noted that the rates are due to be paid by person who is registered as owning the property on the 1st of January).
• Last bills for services such as Water, Electricity, and Telephone
This is an informative guide; it not a legal document. For tax and legal advice we recommend that you retain the services of a professional accountant / solicitor familiar with conveyance laws in Lanzarote