Taxes on selling a property in Spain as a non-resident

The 3% withholding

Where the seller is not tax-resident in Spain, the buyer is legally obliged to withhold 3% of the agreed price and pay it to the Agencia Tributaria using form 211, within one month of the date of the deed. It is not the buyer's choice and it is not negotiable: if the buyer fails to do it, the property itself stands as security for the tax, so the authorities can pursue the buyer for it.

That withholding is not the tax: it is a payment on account. The actual tax is worked out afterwards on the gain realised. That is why the buyer must give you a copy of the filed form 211: without that receipt you cannot offset it in your return.

The Modelo 210 on the capital gain

The seller files the Modelo 210 declaring the gain within the three months following the month the buyer has to pay over the withholding — four months from the sale in total. The rate applicable to gains from transfers of property is 19%.

The gain is not the crude difference between what you paid and what you receive. It is calculated like this:

• Acquisition value: the purchase price plus the taxes and costs you bore at the time (transfer tax or VAT plus stamp duty, notary, Land Registry, gestoria fees) and plus the cost of improvements you can evidence with invoices. Repairs and ordinary maintenance do not count as improvements.
• Transfer value: the sale price less the costs you bear now: estate agency commission, the municipal plusvalia if it falls to you, the energy certificate and any costs of cancelling a mortgage at the Land Registry.

The difference between the two is the gain to which the 19% applies. Keeping the invoices from the original purchase and from any renovation work is what makes the difference: without receipts those amounts cannot be added to the acquisition value, and the tax goes up.

When the withholding exceeds the tax

The 3% is calculated on the full sale price, whereas the tax is calculated on the gain. If you have sold with little profit — or at a loss, which is common for properties bought at the top of the cycle — the amount withheld can comfortably exceed what you actually owe.

In that case you claim a refund of the excess in the Modelo 210 itself. For the Agencia Tributaria to be able to refund, you need a valid bank account and to be up to date with your obligations for earlier years. That last point is what blocks most refunds: if you have years of unfiled imputed income or rental returns behind you, it is worth regularising first, as we explain in this answer on overdue years.

The municipal plusvalia

Separately from the state tax, the town hall charges tax on the increase in land value. One detail here affects non-residents specifically: the buyer acts as substitute taxpayer, so it is the buyer who pays it over, even though the cost is normally deducted from the price. The deadline is 30 working days from the deed. We cover it in our guide to the municipal plusvalia for foreigners.

Exemptions worth knowing about

• Reinvestment in a main home. Residents of the European Union, Iceland and Norway can claim the reinvestment exemption if the property sold was their habitual residence in Spain and the proceeds are reinvested in another main home within the legal period. It is a narrow case: it does not cover second homes or investment property.
• Sellers over 65. The exemption on selling a main home is available to Spanish tax residents, so a non-resident cannot apply it.
• Double taxation treaties. They do not exempt you from Spanish tax on a property located in Spain, but they determine how double taxation is avoided in your country of residence. To rely on one you need a certificate of tax residence issued for treaty purposes.

Documents to prepare

• The purchase deed and receipts for the taxes and costs paid at the time.
• Invoices for improvement works, if you want them added to the acquisition value.
• The sale deed and the estate agency invoice.
• A copy of the form 211 filed by the buyer.
• Proof of payment of the municipal plusvalia.
• NIE, certificate of tax residence and a bank account for the refund.

An order of play that saves money

These three obligations have different deadlines and influence one another: the municipal plusvalia paid reduces the gain on the Modelo 210, and outstanding returns from earlier years can hold up the refund of the 3%. So it is worth working out the result before signing, not afterwards: it is the only way to know what you will really receive, and to spot in time that a receipt from fifteen years ago is missing.

At Asistenio we run that calculation in advance, coordinate the withholding with the buyer, file the Modelo 210 and pursue the refund where due, acting as your fiscal representatives before the Agencia Tributaria.