selling at a loss

Hi,
I am going through a divorce and it is looking likely the Spanish house will go up for sale.
It will be sold for a loss,(value when bought in 2010 76000 euros) it will go up for sale for 50000 euros, please can you let me know what sort of costs will be involved in selling this, and are costs split equally? I would like to keep it but is not looking likely.

Hello Video,

If the dwelling is in both your names, the costs of the sale are split, unless there is an agreement indicating something different in the divorce court process.

These are the typical costs:

• Local Plusvalia; this can be calculated after checking the property details, though if the value is so low, the tax won't be very high.

• Capital Gains Tax: In this case, as you are selling at a loss ( there is no gain ) and the tax will be 0 €. However, the buyer must retain 3% of the selling price and deposit it at the Tax office account. Afterwards, you will have to declare the tax, showing you did not gain any income, so the Tax office will return the retained percentage. In case you had failed to pay the Annual Income Tax while being owners of the sold property, the Tax office can charge the due amounts for the unpaid income tax from that 3% retention.

• If there is a mortgage that has to be cancelled, the mortgage cancelation commission will have to be paid as well ( the commission amount is indicated in the mortgage deeds ) , plus the costs of the mortgage cancelation at the Land Registry. The amount will depend on the amount of the debt at the time of the sale.

• Also, a new regulation was passed very recently, where an energy efficiency certificate issued by an official technician is required to be handed to the buyer whenever a house is sold. The cost of this certificate is 300 € approximately.

• Finally, if you wish to be represented by a solicitor, legal fees will be involved, that are usually in the region of 1% of the selling price. However, due to the low price of the property, a lawyer will probably request a fixed amount ( higher than the 1% of the current value of the house you are selling ). On top of that, you need to add the 21% VAT.


Regards,