How To Become a Real Estate Agent in Spain
Tax Agency (Hacienda)
In this article, we will talk about all the details on how to become a real estate agent in Spain. Although it may seem that it is a profession subject to many administrative controls for its exercise – since the principal object of real estate mediation is housing, a first necessity that has an essential social function constitutionally attributed – nothing is further from reality.
To become a real estate agent in Spain, it is unnecessary to be registered, have a license, or have a title, pass an exam, or have a real estate agent certification. Anyone can be a real estate agent. But not everyone will get excellent results in the exercise of their activity.
What will set you apart from the competition?
Basically, be adequately trained to develop in the complicated world of real estate and be registered. Neither is mandatory, but we consider the training essential. Having a professional collegiate offers the client an action that meets the criteria of independence and transparency and has the College’s help in legal and technical matters.
You can find much information on the Internet about the skills that an API (“Agente de Propiedades Inmobiliarias” or Real Estate Agent) needs. There are advantages and disadvantages to being a freelance real estate agent. However, in this article, we will focus on guiding you about the procedures you must perform to exercise the activity and taxes you must settle legally.
Register to become a real estate agent in Spain
Register in the Tax Agency
Register using the form 036 or the simplified version 037. You can do it in person by requesting an appointment at the Tax Agency or if you have a digital certificate through the following link on the Treasury website.
Register in Social Security
Again, you can do it in person by going to a Social Security office to present your ID and your registration at the Tax Agency. You can register through the Electronic Social Security Headquarters with a digital certificate, the option “Registration of self-employment”.
IAE heading for your registration at the Tax Agency
To register in the Treasury, you will need to frame your activity in a specific IAE heading. The one that you must mark is: Group 721. Collegiate Agents of Industrial Property and Real Estate Property.
This activity is professional. For that reason, include it in the second section of Royal Legislative Decree 1175/1990 of the tax on economic activities.
Designated space for your activity
Remember to specify the square metres of the room where you carry out your activity. One advantage of exercising your activity as a freelance real estate agent is that you will not need a place open to the public. Still, you will need space to manage your projects.
Usually, professionals dedicate part of their home to the exercise of their activity. Since 01/01/2018 Law 6/2017 of Urgent Reforms of Self-Employed Work allows to deduct expenses of housing supplies. These are water, gas, electricity, telephony and the Internet.
They are deductible in the percentage resulting from applying 30 per cent to the proportion existing between the home’s square metres designated to the activity concerning its total area. This article delves into the process of computing these expenses.
How does your professional activity affect your billing?
You perform a professional activity when you issue an invoice for your services to a Spanish company or a self-employed worker. So, you must include an income tax withholding. That is, your client will keep part of your fees to enter them in the Treasury in your name.
Your client is a tax collector. So he must pay the Tax Agency an amount that is considered a payment on account of your personal income tax.
The withholding percentage may be 7% or 15%. The general rate is 15% and by default.
You can only apply 7% if you are starting your activity. Also, you couldn’t be working as autonomo in the last 12 months before registration. You can apply the 7% rate during the financial year of the beginning of the activity and the following two exercises.
Here is an example of an invoice with a 15% withholding:
Real estate agent fees ……………………….…… €1,000.00
VAT 21% ……………………………………….….. €210.00
Withholding -15% ………………………………… €-150.00
Total invoice ………………………….……..…… €1,060.00
In case that you invoice individuals, you shouldn’t consider any withholding.
VAT when you become a real estate agent in Spain
The real estate agent’s activity is subject to VAT. That means you must include 21% VAT on your invoices, as we have showed before.
Besides, you must submit quarterly VAT form 303 (submission dates: 1Q-20/April, 2Q-20/July, 3Q-20/October, 4Q-30/January) and form 390 of annual VAT summary (submission date: 30/January).
If the result for form 303 is positive, you pay that amount in the corresponding quarter. If it is negative, you can compensate it in the next quarter. Then, in form 303 of the 4th quarter, you can request a refund.
The personal income tax (IRPF)
Usually, the real estate agents invoice individuals, so their income will not be subject to withholding. In that case, the regulations stipulate they must submit a quarterly form 130 as payment on account of their annual personal income tax.
How much is the amount of that form?
Well, you will pay 20% of your net income quarterly. That is, to the result of income less expenses we apply 20%, and we get the amount to pay.
You should know that the sum of the amounts paid in the four forms 130 of the financial year is not the payment of personal income tax. It is merely a payment on account that when making your Renta statement will be considered reducing the amount that you pay or they can even give you a refund.
Beware of cash payments
The Law from 2020 establishes that you cannot pay operations in which any of the parties involved may act as an entrepreneur or professional, with an amount equal to or greater than €1,000 or its countervalue in foreign currency.
Suppose the Tax Agency detects this type of operations, which are severe administrative infractions. In that case, they will sanction you with 25% applied to the amount paid in cash.
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