Selling your property in Spain TummersInvest Service

The Plusvalia, literally ‘added value’, is a municipal tax levied on the sale of a home. It is calculated based on the cadastral value of the property (Valor Catastral) and based on the number of years the property has been in your possession. In the heyday of the Spanish housing the Valor Catastral tended to be significantly lower than the market value of the home. After the bursting of the Spanish property bubble the Valor Catastral is often higher than the market value.

The Plusvalia is actually a tax on the value of the land on which the house stands. The municipality says that the land has risen in value, since all kinds of infrastructure improvements have been made in the area over the years. For example, the maintenance of existing roads or building new roads, construction and maintenance of the sewerage, street lighting etc.

The amount payable to Plusvalia therefore depends on the Valor Catastral and the period in which you have had the home ownership: the longer the period, the higher the amount of tax. The amount can really add up. It is therefore wise to ask your broker or attorney to find out in advance how much you have to pay Plusvalia. For this they can visit the town hall. At the town hall, they can calculate exactly how much Plusvalia you have to pay. They do this by using the registrated value in the land register. Now that the housing market has collapsed, you can consult with the municipality to arrive at the lowest possible value.

When setting up the contract you can agree who pays the Plusvalia, the buyer or the seller. In the past, when the Spanish housing market was still booming it was usually paid by the buyer. Nowadays, however, the roles are reversed and the seller pays the Plusvalia.

The Plusvalia must be paid within 30 days after the sale of the property. You can pay at the town hall. The buyer may also require that the Plusvalia is deducted from the sale price. This is to prevent that the seller leaves without paying. In this case, the purchaser would have to pay the Plusvalia. For the buyer, it is reassuring to know that he did not pay for the Plusvalia.

The license of first occupancy, in Spanish called “licencia de primera ocupación” or in some parts of Spain “cédula the habitabilidad” is an administrative license issued by the municipality where the property is located, and is a permission for the owner to legally engage the home.

When buying your home, you have probably received this declaration, with a focus on probably, because in the early years they did not look so closely.

The “cédula the habitabilidad” on the date of sale may not be older than 5 years.
However, if this date has already been exceeded, or if you are not in possession of a “cédula the habitabilidad”, it should still be requested by the seller.
To request a “cédula the habitabilidad” a professional should be enabled, in this case a competent architect.

Costs

Costs depend on the municipality in which the property is situated, and the sizes of the property to sell.
Tummers Invest has good contacts with various architects who are qualified to apply for a “Cédula the habitabilidad”
Costs for this application vary normally between 200 and 400 euros