Many foreign homeowners in Spain face this question at some point: Can I sell my house even though I still have an outstanding mortgage?
The answer in this case is yes, but it is important to know all the nuances and steps to follow so that the operation is safe, legal and, above all, beneficial for all parties and does not generate any future problems for the seller.
At MAM Solicitors, we are specialists in advising and carrying out the necessary procedures for international clients who wish to sell their property in Spain. We have a specialised team that is 100% prepared to assist you in your own language.
If you are thinking of selling your property in Spain, this article is of interest to you.
Don’t miss our brief guide to learn all the necessary steps to sell a property in Spain, even if you are paying your mortgage.
Let’s get started!
- Check the status of your mortgage:
The first thing you should do is request a certificate of outstanding debt from your bank.
This document, known as a mortgage balance certificate, indicates the exact amount you still owe the bank and is essential to formalise the sale process without any problems.
- Calculate the costs associated with the sale:
In addition to the cancellation of the mortgage, it is important to take into account other costs associated with the sale, such as possible bank fees for mortgage cancellation, capital gains tax, especially relevant if you are a tax resident in another country, as well as notary and registry costs or those that may arise from other aspects or agency costs.
Many of these procedures, especially the administrative ones, are really complex in Spain, and even more so when you do not know the language or when you try to do them from your country of residence.
At MAM Solicitors we always recommend that a specialist lawyer can help you to estimate these costs accurately and avoid surprises.
- Negotiate with the buyer the cancellation of the mortgage:
In this case, there are two ways that are the most common to proceed:
- Sale with simultaneous cancellation: On the day of the signing before the notary, part of the sale price is used to pay the remaining mortgage. The notary ensures that the bank receives the amount and proceeds to the cancellation of the registration.
- Subrogation of the mortgage: The buyer assumes the existing mortgage, although this option is less common and requires the approval of the bank.
- Cancellation of the mortgage:
Once the debt has been paid, it is obligatory to cancel the mortgage in the Land Registry.
This procedure can be carried out by the lawyer contracted to represent the interests of the seller or it can be done by an agency.
This usually requires a deed of cancellation signed by the bank’s representative. It is important not to omit this step, as a mortgage does not automatically disappear from the register just because it has been paid off.
- Personalised tax advice:
If you are not a tax resident in Spain, it is very likely that you will have to pay some kind of withholding tax on the sale price.
The Spanish tax authorities often require this from non-residents to cover possible capital gains tax. Subsequently, you can apply for a partial refund if applicable.
Why MAM Solicitors?
At MAM Solicitors we have over 30 years experience in helping foreign nationals with all the legal aspects of buying and selling property in Spain.
We accompany you through the whole process so that you do not have to worry about administrative, fiscal or legal issues.
Our services include:
- Review and drafting of contracts.
- Notary representation.
- Tax and fiscal management
If you are thinking of selling your property in Spain and you still have an active mortgage, MAM Solicitors can help you in the right way.
Do not hesitate to contact us if this is your case or if you need any kind of help.
We look forward to hearing from you.
