Moving out of Andalucia - the cost of selling

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alig99
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Moving out of Andalucia - the cost of selling

Postby alig99 » Sun May 01, 2016 2:36 pm

Just thought I would share the costs of selling our property in Canaillas De Albaida.

Since we bought the property in 2007 there is has been lots of changes in the administration of things like water and tax. And I confess we didn't think to find out how much it would cost to sell when the time came and of course those TV shows never mention this area. So whilst we are pleased to have sold our property our lawyer advised us that the estimated cost will be 35,0000 Euro's. this is to cover 10,000 estate agent fees (not negotiable) 10,000 Defco (think that the initials) just in case we have to pay this, 3,000 Legal fees, 8,000 non resident tax but might get this back in a year's time and various other retentions to pay any outstanding bills.... there might be a hell of a lot of cheap houses out there but it ain't cheap to sell. :crazy:

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Re: Moving out of Andalucia - the cost of selling

Postby gus » Sun May 01, 2016 3:52 pm

How much did you sell for? Estate agency fees look high buT, depends what you got for that.

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Re: Moving out of Andalucia - the cost of selling

Postby Beachcomber » Sun May 01, 2016 4:27 pm

You haven't included plus valía. That could be quite high after ten years. I take it by €8.000 non-resident tax you mean the 3% retention against your capital gains tax. This would make your selling price about €270.000 which would mean your estate agent's fee is about 3,7%.

By Defco I take it you mean a Declaración de Asimilado Fuera de Ordenación.

Make sure you get proper receipts for all of the expenses (including the estate agent) then you can set these against the sale price when you make your capital gains tax declaration.

If you are eligible for a refund of any or all of the retention this should be paid within six months of the CGT declaration being presented.

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Re: Moving out of Andalucia - the cost of selling

Postby Miro » Sun May 01, 2016 5:34 pm

If the TV shows covered this aspect of owning property in Spain, there would be no shows - because nobody would buy in Spain in the first place.
It would be interesting to see a comparison of the costs of buying & selling a similar priced property in the UK.

From the title of the thread, there's a hint of a suggestion that you are moving to elsewhere in Spain. If this is your primary residence, and you are in fact a fiscal resident, there shouldn't be any 3% retention, and if you're reinvesting all the proceeds in another property there shouldn't be any CGT.

What is Declaración de Asimilado Fuera de Ordenación, by the way? Never heard of that one.
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Re: Moving out of Andalucia - the cost of selling

Postby alig99 » Sun May 01, 2016 8:08 pm

Thanks for your comments, The estate agent fees are high in our opinion but it is the standard cost here, its the basic price and the same that 4 of our friends and neighbours have paid when they sold over the past 3 years. We knew the price when we agreed the price with the agent but they are ridiculously high more than the current charges in the UK. We got the generally marketing package as far as I am aware which included showing people the house (but this didn't include telling us when they showed someone around).
Thanks for your advice Beachcomer; all the info we received has been from our lawyer who will deal with the taxes and times schedule.
Miro we are definitely not buying anything else in Spain, my OH says he's not putting any more money into this country (he's part Spanish btw). FYO no need to worry about capital gains tax we made a small lost (fortunately) on our property , which can't be said about several of our friends who have sold.

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Re: Moving out of Andalucia - the cost of selling

Postby Beachcomber » Sun May 01, 2016 10:49 pm

Miro, you may have heard a Declaración de Asimilado Fuera de Ordenación referred to as an AFO or a DAFO. It is another rip-off scam to extract money from people who have already been ripped off once and are often led to believe that following the procedure will make their property legal when it doesn't.

There is not much about it in English on the internet but you will find a newspaper article on the subject here:

http://www.surinenglish.com/20140328/ne ... 81157.html

Alig99, there may be no capital gains tax to pay but if you are non-resident, as you indicate, there will be a 3% retention on the sale value on account of your CGT which you will have to claim back. I have never used an estate agent in Spain but I think commission of 3% to 5% is normal whereas in the UK it is only 1% or less.

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Re: Moving out of Andalucia - the cost of selling

Postby jogger » Sun May 01, 2016 10:56 pm

They have online type estate agents in the UK now that are a fraction of the cost. Maybe it's time for this in Spain.

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Re: Moving out of Andalucia - the cost of selling

Postby vinuela vinny » Fri May 06, 2016 2:42 pm

Hi All

What an interesting post - thank you to the OP and all who have responded so far.....

Just a couple of queries for an old duffer, who may have to go through the same process at some point....

Firstly, am I correct in thinking that 'plus valia' and 'capital gains tax' are the same thing, please? Or am I misunderstanding?

And secondly, are we allowed to offset buying costs (in our case transfer and documents charge [7%], notary, abogado, and registration, totalling some €10,000), AND our improvement costs (again in our case with IVA invoices currently around €5,000), AND any potential selling costs (presumably just the estate agent and legal fees) from any increase in capital value?

We do not incidentally, anticipate any increase from our purchase price in 2004, and a potential selling price at some point in the future, but thought that we would ask anyway

Thank you

Vincent

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Re: Moving out of Andalucia - the cost of selling

Postby concorde » Fri May 06, 2016 4:08 pm

Vining,
This is a site that was given on here to calculate plusvalia.
Dont forget it is not the total Catastral value but the Suelo, i.e. the land the house is built on.
This will be on your IBI. The house and the land equal the total.

http://www.foro-ciudad.com/plusvalia-municipal.php


there was a thread on this


http://andalucia.com/forums/viewtopic.php?f=22&t=35444

CGT is the profit you make on a house, a separate thing.

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Re: Moving out of Andalucia - the cost of selling

Postby Miro » Fri May 06, 2016 4:13 pm

Plus Valia is to all intents an purposes a capital gains tax, albeit not based on any actual capital gain! It's based on the perceived increase in land value, and is payable to the local council. It is completely separate from "actual" capital gains tax, which is payable to Hacienda.
We also bought our current home in 2004. I did a calculation based on selling now, and our Plus Valia works out at around €2,000 :cry:
Stupidly, we also under-declared the purchase price (as was common back then) so although we anticipate selling at a loss, on paper we will have made a gain. Fortunately, yes, you can deduct the purchase & selling costs you mention. I'm not sure about "improvement" costs, someone else will have to answer that one. We'll be reinvesting the proceeds in another home (in the EU, depending on the result on 23/6!) so hopefully will be exempt from CGT anyway.
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Re: Moving out of Andalucia - the cost of selling

Postby vinuela vinny » Fri May 06, 2016 4:35 pm

Thanks very much Concorde and Miro

We'll read and re-read the thread over the next few days, so that we grasp the nuances

The plus valia calculation shows a liability if a sale had been progressed today, of €581, which bearing in mind the bigger picture, would not be a problem. We'll review the calculation each year as we are advised of the new Suelo.......

Very grateful for your help

V

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Re: Moving out of Andalucia - the cost of selling

Postby Miro » Fri May 06, 2016 4:44 pm

Miro wrote:It would be interesting to see a comparison of the costs of buying & selling a similar priced property in the UK.


Answering myself :P , by a conservative estimate, when we do finally sell up here, I reckon our combined buying & selling costs will have been at least €22K.
Long time since I bought in the UK, but a bit of Googling tells me that if we were to buy a comparable property in our preferred location today for a similar price to what we hope to sell for here, we can expect our biggest single expense to be stamp duty of less than £1000, plus survey & conveyancing fees, probably another grand or so. Selling again, estate agent fees of perhaps a couple of grand, and a few hundred quid for legal fees.
Don't know if I'm in the ball park with these, but if so...BIG difference!
Don't worry about what people think, they don't do it very often

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Re: Moving out of Andalucia - the cost of selling

Postby vinuela vinny » Fri May 06, 2016 4:56 pm

When we downsized in 2003 from south London to Cambridgeshire, the process of selling (property worth £300k) and buying (property worth £155k) cost us around £10k, made up of £4891 Estate Agent, £3507 Solicitor, £25 Telegraphic Transfer, £412 and £285 surveys, and £799 removal - total c£9894; and then of course there were all the other costs - new kitchen, new bathroom, carpetting and curtains throughout, decor, some new furniture etc, etc, etc - I reckon another £25k......... But it was worth every penny.......

Hope this helps someone out there......

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Re: Moving out of Andalucia - the cost of selling

Postby concorde » Fri May 06, 2016 5:12 pm

Just found this, can't quite remember where from, but it could have been from this forum.

I think it's a calculator for working out how much you can sell your house for at the lowest figure that the tax man/local town hall will accept.
However, when I used my Valor Catastral and this year, it did give an extremely low sum, so I've possible got it wrong.

Hope someone can shed some light on this?

http://www.juntadeandalucia.es/economia ... Urbana.jsp

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Re: Moving out of Andalucia - the cost of selling

Postby El Cid » Fri May 06, 2016 5:19 pm

Yes, that's the correct calculator. It can produce some very strange results depending on where you live. The "valuation" may be more or less than the market value. In our case the valuation is only about 30% of the worse case market value. It certainly minimises the IHT liability!

In some areas it can work out the exact opposite!

Sid

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Re: Moving out of Andalucia - the cost of selling

Postby Miro » Fri May 06, 2016 5:23 pm

I've got that link saved, too, Concorde. Remember, this only calculates the minimum figure you can sell at without arousing suspicions of under-declaring, and subsequent claims for more transfer tax from the buyer. Yes, it comes up with a paltry figure (I'd get more if I burnt my place down and claimed on the insurance!) I believe bottom-feeding agents like Tecnocasa use this very same tool when they claim they can give you a "professional" valuation of your property. When they came round to see my place and subsequently "value" it, I'm afraid I laughed the poor guy (they all look like Mormons for some reason) out of the house and haven't stopped laughing yet :lol: On top of the insulting "valuation" they also wanted exclusivity, and 6% commission! :crazy:

Based on Vinny's figures (thanks for that) I reckon I'm not too far out on my guesstimate of costs for buying when we do go back to the UK.
Don't worry about what people think, they don't do it very often

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Re: Moving out of Andalucia - the cost of selling

Postby JuliaStein » Fri May 13, 2016 9:46 am

Wow that's really a lot. Usually all payments do not exceed 10% of a property value.

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Re: Moving out of Andalucia - the cost of selling

Postby Miro » Sat May 21, 2016 1:48 pm

Hope I'm not breaking any rules by posting this link, but the article sums up perfectly exactly what I've felt for years, that Spanish property transaction costs are not only a hindrance to any semblance of a market recovery, but also damaging to the economy as a whole, and simply make no sense whatsoever. The increase in transfer tax when the crash had already happened defied belief. It seems to me there is not one politician in Spain who has so much as O'Level economics.
http://www.spanishpropertyinsight.com/2016/05/20/spanish-transaction-costs-double-european-average/?utm_source=Spanish+Property+Insight+News+Bulletin&utm_campaign=f8097537c7-SPI_NB210516&utm_medium=email&utm_term=0_5c1bbc37e8-f8097537c7-137948317
Don't worry about what people think, they don't do it very often

"Acquiring a dog may be the only opportunity a human ever has to choose a relative," Mordecai Siegal 1935-2010.

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Re: Moving out of Andalucia - the cost of selling

Postby katy » Sun May 22, 2016 9:32 am

Estate Agents charges in the UK average of 1.5% but if selling a property over £500,000 it can be negotiated down to 1%. Stamp duty hikes up the cost of buying but in a buoyant market you just tag it on to your selling price. Solicitors fees are low and they do so much more than the Spanish ones. Neighbourhood searches, neighbour checks etc.

When we bought in Florida buying costs were only around 1% of purchase price although agents do charge around 5% to sell.


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