Thinking of Selling

Selling Property in Lanzarote

Optima Estate can market your Lanzarote property both locally and Internationally through all the foreign printed magazines available in the Island and via foreign web sites for buyers searching on the net.

It is important when selling your property that you are aware of the expenses you will incur when you do it.

Sale of property by non-residents

When property is sold by a non-resident of Spain, purchasers must withhold 3% of the purchase price (not the gain) and pay it over to the Spanish tax authorities as an advance payment of capital gains tax on behalf of the vendor. This amount represents a capital gains tax on the profit made by the seller at the time of the sale. That is the difference between the current (official) sale price and the price paid by seller when he/she originally purchased the property + the value of any reforms and improvements carried out since then (as long as you have a proper invoice with IGIC tax paid -in the case of Canary Island-).

If this is not paid, the purchaser can be fined and the unpaid tax becomes a charge over the property itself. If this 3% exceeds the tax due on the gain, a repayment will be made of the excess; however, if the tax due is more than the retained amount, further tax will be due in Spain.

The vendor must file a Spanish tax return on the transaction within three months of the sale before any repayment can be made (we will put you in touch with a tax adviser who will do it on your behalf).

In addition to any mainstream capital gains tax on the sale of property there is also a local tax in urban areas levied by Spanish town halls commonly known as the Plusvalia (which literally translates as "gain") on the growth in the value of urban land (excluding the buildings).

The real growth in value of the land is reflected by the allowance of a realistic allowance for inflation, unlike the token allowance in Spanish mainstream capital gains tax.

The tax rate varies depending upon the size of the land , the length of ownership and population in the area; with the town hall fixing a rate within this.

Any Plusvalia tax paid is allowed as a cost of disposal in calculating the mainstream capital gains tax and so is the fee you pay to the selling agency.

Please contact us to arrange an informal chat if you wish to sell your property through us.