How much does it cost to sell a flat: costs and taxes explained

"I sell for €200,000, I keep €200,000." If only. Between signing the arras (the earnest-money deposit contract) and the money in your account there's a series of costs and taxes worth knowing before setting the price, because they change the number you really take home.

This is a general explanation, not a personal calculation: every sale depends on your case. For exact figures, talk to your tax adviser.

1. The agency commission

If you sell with an estate agency, its commission is the first cost. There's no official percentage: it's negotiable and usually expressed as a percentage of the sale price. Add the corresponding VAT on top.

Always ask: does the commission include photography, featured portal listings and support through to the notary's, or are they extras?

2. The plusvalía municipal (IIVTNU)

The Tax on the Increase in Value of Urban Land is charged by the council where the property is. It taxes the increase in the value of the land between when you bought and when you sell.

Two important things:

• If the land hasn't appreciated (or has lost value), current law lets you prove it and the tax can be zero or very low. It's no longer paid "just because" like before the reform.
• Each council applies its own coefficients within the legal limits, so the amount varies by municipality.

The payment deadline is short (normally 30 working days from the escritura (the notarial deed)), so don't leave it to the last minute.

3. Income tax: the capital gain

The tax office treats the difference between what the flat cost you (purchase + costs + justified renovations) and what you get when selling (price − sale costs) as a capital gain, taxed in the savings base of the IRPF (Spanish personal income tax) by bands.

There are exemptions and reductions worth knowing:

• Main residence and reinvestment: if you sell your main residence and reinvest the amount in another main residence within the deadline, the gain can be exempt. It has strict conditions (deadlines, what counts as a main residence).
• Over 65s: exemption of the gain on selling the main residence, with no need to reinvest.
• Dación en pago and special situations: the dación en pago (handing the property over to settle the mortgage debt) and special situations have their own treatment.

This is where the most money is at stake and where most mistakes are made. Consult a tax adviser before signing the arras, not after signing the deed.

4. Cancelling the mortgage

If you still owe on the mortgage, it must be cancelled in the Registro (the Property Registry). Even if the bank takes the debt from the sale price, the registry cancellation is a separate procedure with its own cost: the notary's fee for the cancellation deed and the registry fee.

Careful: even if you finished paying the mortgage years ago, if you didn't cancel it in the Registry it still shows as a charge. Check it in time.

5. Notary and Registry

The buyer normally pays for the sale deed, but parts of it fall on you as seller: the mortgage cancellation deed if there is one, and any copies you request. It's not the biggest item, but it counts.

6. The energy certificate

Selling without an energy efficiency certificate isn't an option: it's mandatory to advertise and to complete the sale, and the fines for not having one are real. Its cost is modest compared to everything else, but you have to order it in advance because the technician has to visit the property.

7. Other costs people forget

• Homeowners' association: you have to provide the certificate of being up to date with fee payments. If you owe fees, they're deducted at the notary's.
• IBI: that year's IBI (the local property tax) is split between buyer and seller as agreed (by default in law, whoever owns on 1 January).
• Broken arras: if you sign arras penitenciales (penalty-clause earnest money) and back out as seller, you return double. It's not a "cost", but it's a risk worth knowing.

The number that matters

Before setting the price, do this sum on a sheet of paper:

Sale price − outstanding mortgage − commission − plusvalía municipal − estimated income tax − cancellation and certificate costs = what you keep.

That's your real number. Everything else is decoration. If you do it at the start, you avoid the unpleasant surprise of discovering the costs once you've already signed on a price.

Practical rule: ask your adviser for an income-tax and plusvalía estimate before signing the arras. That's the moment when you can still negotiate the price with all the information.

Going to sell in Cullera or La Safor? At Llevant Patrimonial we help you put the numbers first before signing anything. Opening soon.