REAL ESTATE ACTIVITIES

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What expenses does the sale of a home involve? II

  1. The derivatives of a mortgage loan to finance the construction, in a new work.Those attributable to the writing of new work and horizontal division of the new building.
  2. The tax on the increase of the value of the land or the surplus value, in all the cases.
  3. The derivatives of the intervention of a real estate agent, in all cases.
  4. The connection of access to general supplies.
  5. Derivatives of obtaining the documents to be delivered to the buyer.
  6. Obligation to make the declaration of income the following year.
  7. Pay IBI for the entire fiscal year in which the sale takes place.
  8. Unless otherwise agreed, the tax on the increase in the value of urban land (municipal capital gains) is borne by the seller.

Usage: As a consequence of the transfer of ownership of a property or of the constitution or transfer of real property rights (for example a usufruct), the tax has to be paid on the increase in the value of urban land, Also known as surplus value.

In the case of sale of a property (floor, parking space, store, shop, house, etc.) the person, company or entity that sells has to pay the tax due to the increase in the value of the land while Owned. If the transmitter or seller is a non-resident natural person in Spain, the obligor to the payment will be the acquirer.

In the case of inheritance or donation, it is the new owner who has to pay the tax, with bonuses up to 95% in Barcelona by kinship and VHF.

Payment must be made within 30 business days from the date of transmission. In the case of inheritances, the term is six months from the date of death.

La cuota a pagar está en función del valor del terreno en el momento de la transmisión y de los años que el transmisor ha sido propietario de este (se calculan como máximo veinte años). Para determinar el importe, se multiplica el valor del terreno por el número de años que se ha tenido la propiedad y por el porcentaje anual  en el caso de Barcelona, el resultado se aplica el tipo impositivo, que es del 30%. Cuando el período es inferior a un año, se aplica el porcentaje del 4% anual en función de los meses completos, con excepción de las herencias en las que sólo se consideran años completos.

Declare the sale on the IRPF declaration: (if they reside in Spanish territory)

If the purchase price exceeds the sale price, there will be a capital gain that is taxed in the IRPF. It should be noted that the purchase price includes taxes paid on the purchase and improvements made in the property. The sales tax also includes the taxes derived from the sale. Obviously, if the sale price is lower than the acquisition price, it is considered that there has been an equity loss. The calculation of surplus value is made exactly as in 2015, the purchase price is updated by a coefficient and a tax rate is applied:

From 0 to 6,000.- € 19%

From 50,000.- € the 23%

From 6,000 to 50,000.- € 21%

It is not necessary to state:

  1. The sale of the habitual residence by people over 65 is exempt from taxation.
  2. The sale of the habitual residence by the under 65s is exempt from taxation (totally or partially) if within two years (before or after) the amount is reinvested in the purchase of a new habitual residence, not second residence. That yes, the exemption only applies on the part of the profit that is destined to buy another house. The one that is not used should tax.
  3. The sale of housing, other than a regular home, may only be exempt if the person who sells it is over 65 years old and hires an annuity (with a maximum amount of 240,000 euros of sale price).
  4. If the sale generates a loss of equity to the seller. Selling a house is associated with several expenses and if the sale price is lower than the acquisition price and, therefore, it causes a loss instead of an equity gain, it should not be taxed. Moreover, the handicap can be offset by gains made during the next four years.

The equity gain or loss is determined by the difference between the acquisition and transmission values ​​of the equity items:

  1. The acquisition value is determined by the sum of three concepts and the subtraction of a quarter:
  • Actual amount of the acquisition. When the acquisition of the item that is now transmitted has occurred for consideration, its acquisition value will be the actual amount for which it was acquired.
  • Cost of investments and improvements. If investments and improvements have been made in the purchased items, their cost is added to the acquisition value.
  • Expenses and accessory taxes. All the expenses and taxes inherent to the acquisition that have been satisfied by the acquirer, except for interest, are added to the calculation of the acquisition cost amount.
  • Amortization. The amortizations that correspond to amortizable assets reduce the acquisition value.

      2.The transfer value is determined by computing two items, the actual amount of the alienation minus the expenses and taxes inherent to the transmission that have been satisfied by the      seller.

And so far our chapter of Expenses in the purchase of a home! Contact us if you have any questions.

13 Jun 2017
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What are the costs of buying a home? I

When making a decision to buy a home, it is important to bear in mind that not only do you have to pay the price of the property, but also have to pay a series of compulsory expenses, whether with or without mortgage, there are costs " Additional "that must be taken into account so that there are no surprises.

If the purchase is to be made through a mortgage loan, a series of independent expenses are generated:

  • The appraisal of housing: an independent expert will do an appraisal of the property for the financial institution. Normally the certification will not be valid to apply for the loan in another entity.
  • Check in the Property Registry: it is for the bank to have the assurance that the house is free of charges before granting the mortgage.

Based on this assessment (300-400.- €) will know the possible buyer if you can make the purchase or not since normally the banks give 80% of the lowest price between the purchase and said valuation, so it is very important Be clear the amounts to be paid.

The costs borne by the buyer are:

  1. The purchase price of the home.
  2. The expenses of writing mortgage credit, if any.
  3. VAT, 10% of the cost of housing if it is a new work or the tax on property transfers if it is a second hand home (Catalonia is 10%).
  4. The minutes of the notary to whom the public deed of sale is granted, unless it is agreed to pay it half-way with the seller.
  5. The expenses of the registration in the Property Registry and the expenses of said management, if done by a third party, unless it is agreed to pay it half with the seller.
  6. If a mortgage loan is requested, the loan opening expenses.
  7. Property fees if the purchase is made through this.
  8. The expenses of discharge and / or change of the holder of the services of water, electricity, gas, etc.
  9. The insurance, as a minimum, of the risks arising from fortuitous causes, force majeure and damages to third parties.

Description of expenses:

  • Notary: the notary's fees when writing the sale and if there is a mortgage, deed of mortgage loan, subrogation in a pre-existing mortgage, etc .... These fees are regulated by the administration and depend on the price of the property.-Taxes imposed on the sale: there are two different taxes depending on whether the house is new or second hand.
  • Taxes levied on the sale: there are two different taxes depending on whether the house is new or second-hand.
  • New housing (first transmission): the tax levied on this property is VAT (value added tax), the amount is calculated by applying a percentage over the book value. This percentage is 10% in free housing or official protection, and 4% in housing classified as special regime official protection.

In general, and whenever the sale of a home is subject to VAT, the AJD (Tax of Documented Legal Acts) must also be paid. The type to apply varies depending on the autonomous community of residence and the type of document. In Catalonia at the moment it is the 1.5% and in the protected houses is of 0.1%.

When a mortgage is constituted, the Tax of documented legal acts (AJD), which represents 1% of the guaranteed capital, must be settled.

  • Second-hand housing or subsequent transmissions: the tax levied on this type of property is the ITP (Regional Tax on Transfer of Assets) and varies depending on the autonomous community, ranges from 5% to 10% of the price. There are bonuses / reductions in VPO.

Remember that Hacienda can claim a higher payment to the buyer if it considers that the home is worth more than what has been paid for it. Each CCAA has a minimum price table and on them the minimum value of each property is calculated in 2017. For example in Barcelona is the cadastral value X 2,20 = Minimum value. In some CCAA there are bonuses for large families, disabled and / or young people in Catalonia is 5%.

When a mortgage is constituted, the Tax of documented legal acts (AJD), which represents 1% of the guaranteed capital, must be settled.

  • Minutes of property registration: the deed of sale of the property must be entered in the property register and if there is a mortgage, it is also entered as a charge on the property. These rates are officially regulated and are applied by calculating the taxable amount of the property and / or loan.
  • Expenses of management: these are the fees of the manager to carry out all the necessary procedures for the liquidation of taxes and the registration in the Property Registry. The rates of the managers are not fixed and, therefore, it is advisable to know if the agency that carries the documentation offers reasonable prices.
  • Expenses of discharge and / or change of the holder of water, electricity, gas, etc. services.
  • Insurance:
  1.  Insurance coverage is mandatory by law on housing in case of a mortgage loan. Covers only the continent (the structure). In case of total loss of the property, the insurer will settle the outstanding debt to the financial institution and the rest until the amount covered will be delivered to the insured.
  2. Multi-risk housing insurance: includes both the continent and the content (from appliances, jewelry and furniture to civil liability to third parties).
  3. Life insurance or loan repayment: covers the contingencies of death, absolute disability and permanent disability. Normally does not cover partial disability.

Usually the sum of these expenses is around 10 or 15% of the value of the house.

13 Jun 2017
barcelona
buyer
expenses
mortgage
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