Benarroch Real Estate, through our post-sales service, peace of mind management, can help you by explaining what taxes are applicable to foreign residents and non-residents when they buy or sell a property in Marbella. We’d also like to remind you that, through this service, we can help you pay these and other taxes.
We will explain the four possible scenarios below:
BOTH THE SELLER AND BUYER ARE RESIDENTS: When the purchase and sale is carried out between a seller and a buyer who are both residents in Spain, the buyer will liquidate and pay the Property Transfer Tax (ITP, as it is known in Spain) and the seller will pay the Municipal Tax on the Increase in Value of Urban Land or municipal capital gains tax.
THE SELLER IS NON-RESIDENT, AND THE BUYER IS A RESIDENT: Where a resident purchases a property from a non-resident, the buyer will pay the Property Transfer Tax and must also withhold 3% of the purchase price and pay it over to the Tax Authorities on account of the Non-Resident Income Tax of the seller. The non-resident seller will pay the municipal capital gains tax if located in Spain and if not, the buyer must pay it, in their capacity as replacement taxpayer, after having withheld an estimated amount for this upon signing the title deeds. The seller must declare the sale in their Non-Resident Income Tax Return.
THE SELLER IS A RESIDENT AND THE BUYER A NON-RESIDENT: In this case, the buyer is obliged to pay the Property Transfer Tax and the seller, the municipal capital gains tax.
BOTH THE SELLER AND BUYER ARE NON-RESIDENTS: Lastly, if the purchase and sale is carried out between a buyer and seller, both non-resident, the buyer will be obliged to pay the Property Transfer Tax and withhold 3% of the purchase price to pay it to the Tax Authorities on account of the Non-Resident Income Tax of the seller. The seller shall pay the municipal capital gains tax and declare the sale in their Non-Resident Income Tax Return.
Benarroch Inmobiliaria, with our Management and Peace of Mind Service, have wanted to offer you this approach of the situation to make it easier for you know where you stand and what taxes affects you in your purchase and sale operation. Please do not hesitate to contact us, should you have any further queries.
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