Posted: Wed Dec 14, 2022 5:02pm
At the point of sale, your solicitor, in conjunction with the buyer's solicitor, should have calculated a rough amount to cover any outstanding bills, etc, and made a retention of this before the sale money is handed over to the vendor. This is usually a small amount to cover the electric/water/IBI etc., that would still be considered as your own costs. The Notary, however, will retain 3% of the sale amount to cover any Capital Gains tax, which is a totally separate thing. Your solicitor should refund you any of the outstanding monies which were retained to cover outstanding bills etc., along with a proper breakdown with receipts for each sum, once all the outstanding bills, etc. have been paid. Some or all of the 3% retention for Capital Gains tax could be repaid to you, as long as the amount retained is a higher amount than the increase of capital gains that the property may have accrued over the years. This is usually done by comparing the price of the property when you bought it (assuming that the amount shown on the escritura was the amount that was actually paid for the property and that no black money was involved) and the price that is now being shown on the escritura for the sale of the property, also taking into consideration the amount of years that you have owned the property. The Capital Gains tax rate is between 19% and 24% depending on the sales price, so you should be able to roughly work out whether it's best to just say goodbye to the 3% or wait to see whether you would actually owe the tax-man even more than the 3% amount!! You don't
mention whether you are a Spanish resident or not or whether the
property that you are selling is your primary residence or a holiday
home. If you are a Spanish resident and selling the property to buy
another property in Spain, then there is no requirement for the Notary
to retain 3%, as long as you buy another property within 24 months. The above would apply to non-resident property owners or Spanish resident
property owners selling up to return to their own country. In order to be able to claim back any overpaid Capital Gains tax, a qualified tax agent will be able to advise you and you can authorise him/her to make a claim on your behalf for a refund of the overpaid tax. It won't just be returned to you! I would recommend that you find such a person before you leave and not just rely on your solicitor, who doesn't seem to have explained the situation to you very well in the first place and probably isn't qualified in tax matters either, as this is a specialised field.
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