Costs when selling a property

As with the sale of a property, costs are incurred that must be deducted from the sales price achieved. It is important to know these costs in advance and to take them into account when setting the selling price. A rough rule of thumb is that about 5% to 10% of the sales price should be planned for ancillary sales costs.

1. Ad valorem tax/Plusvalia: The ad valorem tax is a levy that is due on transactions of second-hand real estate. It taxes the increase in value that the property (not the real estate) has experienced since the property last changed hands. There are 2 calculation models for this:
   1. Cadastral value at sale, with an annual coefficient and max. 30% thereon (the current cadastral value can be viewed online – ask us).
   2. Difference between the current sales price and the purchase price at that time, 60% of which is the share for the property and here also max. 30%.

   The maximum value of 30% varies from municipality to municipality. The seller can choose the better model for himself. The Plusvalia tax liability is payable to the tax office within 30 days by way of self-assessment.

2. IRPF – PROFIT/INCOME TAX: 19% (for non-residents) on the profit between the acquisition price plus incidental acquisition costs and the sales proceeds. For residents, the tax rate is slightly higher – up to 28%. If the seller is non-resident, the buyer must withhold 3% of the purchase price and pay this withholding to the tax office on behalf of the seller within 30 days.
3. Real estate agent: If a broker is involved in the sale, then the brokerage commission is dependent on the signed brokerage agreement.
4. Tax office/Gestoria: For the settlement of the tax debt through the sale, it is advisable to involve a gestoria or a tax office. Here, as a rule, the bill is calculated on a time and material basis.
5. Legal advice/Lawyer: If a lawyer is commissioned with the sale of the property, who takes care of the contractual issues, an expense of up to 1% of the sale price may be due.
6. Other costs: When selling, there may be other costs that fall on the seller. These include, for example, the discharge of mortgages or land charges at the land registry, cheque fees for the deposit of cheques received, the energy certificate to be drawn up, etc.

To ensure a successful sale transaction of your property in Mallorca, it is crucial to consider the costs involved in advance and to have a realistic idea of the expenses. It is therefore advisable to inform yourself thoroughly and seek professional assistance in order to avoid unexpected costs and ensure a smooth sales process.