Hi everyone, I’m dealing with a family matter recently that’s a bit overwhelming, so I’ve come to the forum to ask for advice from those with experience.
Here’s the situation: my father-in-law and mother-in-law are getting older and are planning to move back to their home country for retirement. They own a small apartment in downtown Madrid which was previously rented out. Now that they’re leaving, the property is vacant. We’ve discussed it and feel that leaving it empty long-term isn’t a good solution, as maintenance and taxes are a hassle. We think it’s better to sell it and cash out while the market is still decent. However, we are complete novices when it comes to the selling process in Spain—it feels quite complex, and we’ve heard about things like buying property in Spain on behalf of relatives. So, I wanted to ask for your insights first.
We’ve done some preliminary research online and consulted a couple of real estate agents. It seems the agent commission is a significant expense, ranging from 3% to 6%, and we’re not sure how to find a reliable one. Some agents make grand promises, claiming they can sell the property quickly, but we’re worried about getting locked into an exclusive contract. We’d prefer to find an agent with reasonable fees and high efficiency. Does anyone have recommendations? Or has anyone tried selling a property on their own? Is it particularly difficult?
Summary of the Selling Process and Taxes
I’ve organized the information I’ve gathered so far. Please let me know if I’ve missed anything or misunderstood something.
Estimated Steps for Selling the Property
| Step | Main Task | Notes |
|---|
| 1. Prepare Documents | Title deed (Escritura), Energy Performance Certificate (EPC), etc. | The EPC seems to be mandatory. |
| 2. Property Valuation | You can get a free valuation from banks or agents to get an idea of the price. | Do valuations vary a lot between different institutions? |
| 3. Sign Agency Agreement | Choose between an exclusive or non-exclusive agency agreement. | This seems to be the trickiest part, especially concerning authorizing someone to sell a property in Spain |
| 4. Property Viewings | Cooperate with the agent for viewings. | The property needs to be tidied up to look nice. |
| 5. Sign Reservation Agreement (Contrato de Arras) | The buyer pays a deposit to secure the property. | What is the typical deposit percentage? |
| 6. Closing at the Notary | Sign the final deed of sale (Escritura de Compraventa) and receive the remaining payment. | This is probably the most crucial step. |
| 7. Tax Settlement | Pay capital gains tax and others. | This is the part that worries us the most. |
Regarding taxes, I’ve heard that sellers are mainly liable for two taxes: one is the municipal land value increase tax (Plusvalía Municipal), and the other is the national capital gains tax (IRPF for residents, IRNR for non-residents). The capital gains tax, in particular, seems complicated to calculate, based on a specific * tax rate. My father-in-law bought this apartment many years ago at a very low price, so we expect the tax bill to be quite substantial. Are there any legal ways to reduce this tax liability? For instance, I heard that residents over 65 are exempt from capital gains tax when selling their primary residence, but this apartment isn’t their primary residence, so that option is off the table. I would be very grateful for any guidance from knowledgeable members here. Thanks in advance!
