Selling Property in Spain as a Non-Resident

When the seller is not resident in Spain, the buyer must withhold 3 % of the agreed price and pay it to the tax agency within one month, on form 211. The buyer gives the seller a copy. It is a payment on account of the seller's own tax on the gain.

The seller then has three months from the end of that one-month period to file form 210 declaring the gain. In practice, four months from the sale. If the tax due is less than the amount withheld, the difference is refunded. If it is more, the balance is paid with the return. A seller who files nothing recovers nothing.

• Acquisition value: the purchase price, plus the taxes, notary and registry fees paid at the time, plus improvements supported by invoices. If the property was let, the depreciation allowed for those years is subtracted.
• Sale value: the price, less the costs of selling: agency commission, the municipal tax on the increase in land value, legal fees.

The rate is 19 % whatever the seller's country of residence. Joint owners file separately, each for their share of the gain and of the retention. For inherited property, the acquisition value is the value declared for inheritance tax, plus the costs of the inheritance.

Before paying a refund, the tax agency normally checks that the seller filed the yearly non-resident returns during the years of ownership. Missing years are better filed before the claim than discovered during it. The yearly obligation is explained under non-resident property owners.

Documents that decide the figure: the purchase deed, receipts for the taxes and fees paid then, invoices for improvements, the buyer's form 211 and a tax residence certificate.

Relief for a former home

Residents of the European Union and the European Economic Area who sell what was their main home in Spain and reinvest in a new main home may qualify for relief, under specific conditions. It needs checking before the sale.

The capital gains return is quoted from €405, taxes included, per sale. If you are on the other side of the transaction, see buying from a non-resident.

1. Before signing anything. Gather the purchase deed and the receipts for taxes, fees and improvements. Check that the yearly non-resident returns are filed. Estimate the gain.
2. The deposit contract. It should say that the seller is non-resident and that 3 % will be withheld, so nobody is surprised at completion.
3. Completion. The deed is signed. You receive the price less the 3 %, less the mortgage if there is one, and usually less a provision for the municipal land value tax.
4. Within one month. The buyer files form 211 and gives you a copy.
5. Within four months of the sale. You file form 210 with the gain, claiming a refund or paying the balance.
6. In the following months. The tax agency reviews and pays any refund to the account you named.

• No return filed, on the assumption that the 3 % settled everything. The refund lapses after four years.
• Purchase costs left out because the receipts could not be found. Notaries and registries can issue duplicates.
• Improvements claimed without invoices, and rejected.
• Depreciation ignored for years in which the property was let, producing a figure the tax agency later corrects upwards.
• One return for two owners.
• A refund account in someone else's name. It must be an account held by the taxpayer.
• Unfiled yearly returns discovered during the refund review.

Inherited property. The acquisition value is the value declared for Spanish inheritance tax, plus the costs and tax of the inheritance. If the inheritance was never processed in Spain, that comes first.

Gifted property. The same logic applies with the value declared for gift tax.

Couples. Each spouse declares their half. If one is resident in Spain and the other is not, only the non-resident's share is subject to the 3 % and to form 210; the resident declares the gain in the annual income tax return.

Property bought before 1995. A transitional rule can reduce the gain attributable to the years before 2006, within limits.

Companies. A non-resident company selling Spanish property follows the same mechanism with its own rules on the gain.

Most countries tax their residents on gains from property abroad and give relief for the Spanish tax. The gain is rarely the same in both countries: purchase costs, exchange rates and depreciation are treated differently. A sale that shows no gain in euros can show one in pounds or dollars if the currency moved.

What your home adviser will need from Spain: the sale and purchase deeds, the filed form 210 and proof of payment or refund. The treaty position is explained under double tax treaties.