How much does it cost to sell a home?
Owners who decide to put a home on the market often think the transaction will only bring financial benefits. In reality, selling a home also involves various expenses, including taxes, which should be considered before starting the transaction.
Sale expenses
The main costs of selling a property are:
- Notary fees: under Article 1455 of the Civil Code, the seller pays the costs of executing the deed and the buyer pays for the first and subsequent copies, unless otherwise agreed. Make clear in the agreement how these costs will be shared and request an itemised quotation.
- Habitability: check which document applies to the home and whether it needs renewal. Request a quotation for the technician’s services and applicable fees, rather than assuming an old estimate is still current.
- The energy performance certificate: when it is required to sell the home, request a quotation from a qualified technician. Check what the price includes and whether it covers registration, applicable fees and taxes; do not assume an old estimate is still current.
Optional expenses
- Requesting a Land Registry extract (nota simple): check the current Land Registry fee and the fee charged by the channel through which you request it. Although it is usually of interest to the buyer, the seller should also review the registered ownership and charges and check that the information is correct.
- Mortgage cancellation costs: if the loan has been repaid but the mortgage remains registered, request separate quotations from the notary, Land Registry and, if you use one, the administrative agency. The cost depends on the deed, the necessary procedures and the services commissioned; a single figure cannot be given for every case.
- Estate agency fees: these are agreed in the sales instruction. Confirm in writing the amount or how it is calculated, the applicable VAT (IVA), the services included and when the fees become due. There is no universal percentage that must apply to every sale.
How much does it cost to sell a home: taxes
The tax position depends on the property, the outcome of the sale and the seller’s circumstances. Review the IBI, tax on any gain and, where applicable, municipal capital gains tax; selling does not always mean that all three must be paid.
- Property Tax (IBI): this is an annual tax that accrues on 1 January. The competent authority sets the payment schedule; selling does not mean the entire bill must be paid early. Check outstanding debts and make clear how the parties have agreed to share the cost.
- IRPF: as a general rule, the gain is calculated by subtracting the acquisition value from the transfer value, taking account of legally allowable expenses and adjustments. It is declared for the tax year of the sale, with the return submitted during the corresponding filing period. The tax due depends on the taxable savings base and any exemptions; an outdated tax scale should not be used.
- Tax on the Increase in Value of Urban Land, or municipal capital gains tax (plusvalía municipal): as its name indicates, this tax is levied on the increase in value of the land on which the home stands. Several factors must be considered when calculating it:
- The cadastral value of the land.
- The years elapsed between buying and selling the home.
- The tax rate, which depends on the municipality.
It is also worth checking which tax reliefs are available, in case a reduction can be claimed.
We hope you now know how much it costs to sell a home! At Inmogestión Balear we are property sales specialists and will help and advise you throughout the process. We will explain the sale costs and help you organise and obtain all the documentation needed to achieve your goal with all the necessary safeguards.
To organise both the costs and the outstanding tasks, see Which taxes apply when you sell a home in Mallorca? and Checklist to prepare your home for sale in Mallorca.
