Selling property in Spain as a non-resident involves several tax obligations. The buyer must withhold 3% of the sale price, and you must file a capital gains tax return within 3 months. This guide explains the entire process step by step.

1. The 3% Retention (Modelo 211)

What is the 3% retention?

When a non-resident sells property in Spain, the buyer is legally required to withhold 3% of the sale price (not the profit) and pay it directly to the Spanish Tax Agency (Hacienda) within 30 days of the sale.

Key points:

Amount: 3% of the declared sale price in the deed (escritura)
Paid by: The buyer (deducted from the sale proceeds paid to you)
Form: Modelo 211 (filed by the buyer or their lawyer)
Deadline: Within 30 days of the sale date
Purpose: This is a withholding payment, not the final tax. It's credited against your actual capital gains tax liability.

Example:

Sale price: €300,000
3% retention: €9,000
You receive: €291,000 (minus other costs like agency fees, plusvalía, etc.)
The buyer pays €9,000 to Hacienda via Modelo 211

Important: The 3% retention is mandatory even if you made a loss on the sale. You can claim a full refund if there's no capital gain.

2. Capital Gains Tax Calculation

After the 3% retention is withheld, you must calculate your actual capital gains tax liability and file Modelo 210 within 3 months of the sale.

Capital gains formula:

Capital Gain = Sale Price - Purchase Price - Purchase Costs - Improvement Costs

Deductible costs:

Purchase costs: Notary fees, Land Registry fees, ITP (transfer tax) or IVA+AJD, lawyer fees, gestor fees
Improvement costs: Renovations, extensions, major repairs (with invoices). Regular maintenance (painting, minor fixes) is NOT deductible.
Sale costs: Real estate agent commission, notary fees for the sale deed

Tax rate:

EU/EEA residents: 19% of capital gain
Non-EU residents: 24% of capital gain

Detailed Example:

Sale price: €300,000

Original purchase:

Purchase price: €200,000
ITP (7%): €14,000
Notary + registry: €2,500
Lawyer: €1,500
Total purchase cost: €218,000

Improvements: Kitchen renovation €15,000 (with invoices)

Sale costs:

Agent commission (3%): €9,000
Notary: €1,000
Total sale costs: €10,000

Capital gain calculation:
€300,000 (sale) - €218,000 (purchase) - €15,000 (improvements) - €10,000 (sale costs) = €57,000 capital gain

Tax due (EU resident):
€57,000 × 19% = €10,830

3% retention already paid: €9,000

Additional tax to pay: €10,830 - €9,000 = €1,830

Tip: Keep all invoices for purchase, improvements, and sale costs. Only documented expenses are deductible.

3. Plusvalía Municipal (Local Capital Gains Tax)

In addition to national capital gains tax, you may owe plusvalía municipal (Impuesto sobre el Incremento de Valor de los Terrenos de Naturaleza Urbana, IIVTNU) to the local town hall (ayuntamiento).

What is plusvalía?

A municipal tax on the increase in the value of urban land (not the building) since you bought it
Calculated based on the cadastral value of the land and the number of years you owned it
Each municipality sets its own rates and calculation method
Typically ranges from €500 to €5,000+ depending on location, land value, and ownership duration

Who pays:

By default, the seller pays, but this can be negotiated in the purchase contract. Some contracts stipulate that the buyer pays.

When to pay:

Within 30 days of the sale. The town hall issues a bill (liquidación) which you or your lawyer must pay.

Important 2021 reform:

Since November 2021, you can choose between two calculation methods: the traditional method (based on years owned) or the real method (based on actual land value increase). If you made a loss, you may be exempt from plusvalía entirely.

Tip: Your lawyer or gestor will calculate and pay the plusvalía on your behalf. Always factor this into your sale proceeds.

4. Filing Modelo 210 for Capital Gains

After the sale, you must file Modelo 210 (Non-Resident Income Tax form) to declare the capital gain and pay any additional tax or claim a refund.

Filing deadline:

Within 3 months of the sale date (not the deed date, but the actual transfer date). Missing the deadline results in penalties of 50-150% plus interest.

How to file:

Online: Via the Spanish Tax Agency website (sede.agenciatributaria.gob.es). You'll need your NIE, property details, and purchase/sale documentation.
Through a tax advisor: Most non-residents hire a gestor or lawyer to file on their behalf. Cost: €200-€500 depending on complexity.

Required documents:

NIE number
Purchase deed (escritura de compraventa)
Sale deed (escritura de venta)
Proof of purchase costs (notary invoices, ITP receipt, lawyer invoices)
Proof of improvement costs (renovation invoices with contractor details and IVA)
Proof of sale costs (agent commission invoice, notary invoice)
Modelo 211 receipt (3% retention proof)

5. Claiming a Refund

If the 3% retention (€9,000 in our earlier example) is more than your actual capital gains tax liability, you're entitled to a refund.

Refund scenarios:

Scenario 1: Small capital gain

Sale price €300,000, capital gain €20,000
Tax due (19%): €3,800
3% retention withheld: €9,000
Refund: €5,200

Scenario 2: No gain (loss)

Sale price €300,000, purchase cost €320,000 (including expenses)
Capital gain: €0 (loss of €20,000)
Tax due: €0
3% retention withheld: €9,000
Refund: €9,000 (full amount)

How to claim:

File Modelo 210 within 3 months showing zero or low tax liability
The Tax Agency will process your refund request
Refunds typically take 3-12 months to process
The refund is paid to your Spanish bank account

Important: Don't close your Spanish bank account until you receive the refund. If the account is closed, the refund process becomes much more complicated.

6. Special Considerations

A. Exemption for residents selling primary residence

If you're over 65 or reinvesting in another primary residence, you may qualify for exemptions—but these only apply to tax residents. Non-residents do not benefit from these exemptions.

B. Inherited property

If you inherited the property, your "purchase price" is the value declared in the inheritance tax return (Modelo 650), not the original purchase price paid by the deceased.

C. Property owned for decades (pre-1994)

Properties purchased before 1994 may benefit from indexation coefficients (coeficientes de actualización) to adjust the purchase price for inflation. Consult a tax advisor for complex calculations.

D. Double taxation treaties

If your home country has a double taxation treaty with Spain, you may be able to credit the Spanish capital gains tax against tax owed in your home country. Check with a tax advisor in your jurisdiction.

Sale Process Checklist

1.Before sale: Gather all purchase documents, invoices for improvements, and calculate expected capital gain
2.At signing: Buyer withholds 3% of sale price
3.Within 30 days: Buyer files Modelo 211 and pays 3% retention to Hacienda
4.Within 30 days: Pay plusvalía municipal to town hall
5.Within 3 months: File Modelo 210 for capital gains tax
6.If refund due: Wait 3-12 months for Tax Agency to process refund
7.After refund: Close Spanish bank account if no longer needed

Selling Property in Spain as a Non-Resident