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.
