Selling Property in Spain as a Non-Resident: A Practical Guide to Avoid Mistakes and Pay Only What’s Fair

Selling Your Spanish Property as a Non-Resident: What You Must Know

Real estate transactions in Spain involving non-tax residents are common, particularly in highly desirable coastal or urban areas. However, when a non-resident in Spain decides to sell a property, there are specific tax obligations and legal procedures that must be understood to avoid issues with the Spanish Tax Agency and ensure a successful transaction.

Here’s what you need to know:

1. Who is considered a non-tax resident in Spain?

A person is considered a non-resident for tax purposes in Spain if they:

• Spend fewer than 183 days per calendar year in Spain.
• Do not have their main economic interests or professional activities based in Spain.

This means that even if you own property in Spain, if you live and pay taxes in another country, you are regarded as a non-resident.

2. The 3% withholding tax on property sales

One key requirement is the 3% withholding that the buyer must retain from the sale price and pay directly to the Spanish Tax Agency using form 211. This is an advance payment toward any capital gains tax due from the seller.

• If the seller incurs a loss or earns less than the 3% retained, they may request a refund via form 210.
• If the gain exceeds the 3% withheld, the seller must pay the difference through the same form.

🔎 Practical example: A Canadian citizen sells their apartment in Alicante for €300,000. The buyer must withhold €9,000 (3%) and pay it to the tax office. If the seller proves they only made a €5,000 profit, they can request a €4,000 refund.

Understanding this from the outset is key to avoiding unpleasant surprises.

Capital gains are calculated as the difference between the sale price (less expenses) and the original purchase price (plus taxes and fees).

• For non-residents from the EU, Iceland, or Norway, the current rate is 19%.
• For residents of other countries, the rate is generally 24%.

Keeping proper records of the original purchase, improvements, and related costs is essential to calculate your actual profit and avoid overpaying taxes.

4. Other taxes and costs to consider

Besides income tax, non-resident sellers should also be aware of additional costs:

• Municipal capital gains tax (IIVTNU): This is paid to the local council based on the increase in land value. While it’s typically paid by the seller, the parties can agree otherwise.
• Legal and notary fees: These can vary depending on the region and complexity of the sale.
• Non-residency certificate: Sometimes required to confirm your tax status.

⚠️ Common mistake: Assuming the 3% withholding covers everything. Failing to file the capital gains declaration can lead to fines and the loss of any refund rights. Remember, the 3% is just an advance—it’s not the final tax.

5. Formal obligations and the value of expert guidance

Tax rules may vary depending on your nationality, existing tax treaties, and specific circumstances. It’s highly recommended to work with a specialized advisor who understands cross-border real estate sales.

A qualified professional will ensure full compliance with Spanish law, reduce the tax burden when possible, and prevent delays or costly errors.

❓Planning to sell property in Spain while living abroad?
From mandatory withholding and accurate tax declarations to handling refund claims—the process involves multiple steps. Having expert support can make the difference between a smooth sale and a frustrating experience.

Conclusion

Selling property in Spain as a non-resident requires attention to detail, knowledge of tax regulations, and strict compliance with the process. With the right information and expert guidance, you can complete your sale smoothly, legally, and profitably.