Selling Property in Spain as a Non-Resident: Taxes Made Simple

If you are not resident in Spain and sell a property there, you are subject to Capital Gains Tax (CGT) and some specific withholding rules. Here’s a clear overview:

1. Capital Gains Tax (CGT)

• Rate for non-residents (EU/EEA/EEA with tax treaty): 19% of the gain. (*)
• Rate for non-residents from outside EU/EEA: 24% of the gain (ie UK citizens since Brexit).
• The “gain” = Sale price – Purchase price – deductible expenses (notary, lawyer, real estate agent, improvements, taxes paid when you bought, etc.).

2. Mandatory 3% Retention (Withholding)

• When a non-resident sells a property, the buyer must retain 3% of the sale price and pay it directly to the Spanish Tax Agency (Hacienda).
• This is not an extra tax — it’s an advance payment towards your CGT.
• After the sale, you must file a tax return (Form 210) to calculate the actual CGT:
  • If 3% retained is more than the tax due, you can claim a refund.
  • If it is less than the tax due, you must pay the difference.

3. Other Possible Taxes/Costs

• Plusvalía Municipal: A local tax charged by the Town Hall on the increase in land value since purchase. The calculation depends on cadastral value and years of ownership.
• Agency, notary, registry fees: Selling costs can often be deducted against your gain.

Example:

• You bought for €150,000, spent €10,000 on improvements/fees, and sell for €250,000.
• Net gain = €90,000.
• If you’re EU resident → CGT = €17,100 (19%).
• Buyer withholds 3% of sale price = €7,500.
• You file return → Pay remaining €9,600.

 

 

Example: UK Non-Resident Seller

• Purchase price: €150,000
• Improvements/fees: €10,000
• Sale price: €250,000
• Net gain: €250,000 – (€150,000 + €10,000) = €90,000

1. Capital Gains Tax (CGT)

• Rate for UK non-residents: 24%
• Tax = 24% of €90,000 = €21,600

2. 3% Retention

• Buyer withholds 3% of sale price = 3% of €250,000 = €7,500
• Paid directly to Spanish Tax Agency (Hacienda) as advance CGT

3. Final Settlement

• CGT due: €21,600
• Less withholding: €7,500
• Additional amount you must pay: €21,600 – €7,500 = €14,100

Unlike EU sellers, as a UK seller you don’t benefit from certain allowances, and the higher 24% rate applies across the board.

Example of a UK non-resident example where the gain is small or zero, so you can see how the 3% withholding might be refunded:

Example 1: Small Gain

• Purchase price: €245,000
• Improvements/fees: €5,000
• Sale price: €255,000
• Net gain: €255,000 – (€245,000 + €5,000) = €5,000

CGT (24%) = €5,000 × 24% = €1,200
3% retention = 3% of €255,000 = €7,650

You overpaid.

• CGT due: €1,200
• Retention: €7,650
• Refund you can claim back = €7,650 – €1,200 = €6,450

Example 2: No Gain (break-even)

• Purchase price: €250,000
• Sale price: €250,000
• Net gain: €0

CGT (24%) = €0
3% retention = 3% of €250,000 = €7,500

You paid €7,500 too much.

• CGT due: €0
• Retention: €7,500
• Refund claim = €7,500

Example 3: Loss

• Purchase price: €250,000
• Sale price: €230,000
• Net gain: –€20,000 (loss)

CGT (24%) = €0 (no tax on losses)
3% retention = 3% of €230,000 = €6,900

You can claim back the full €6,900.

 

How to Claim the Refund

• File Modelo 210 with the Spanish Tax Agency (Hacienda) within 4 months after the sale.
• Attach proof of purchase price, expenses, and the buyer’s 3% withholding payment (Modelo 211).
• Refunds usually take 6–12 months to process.