Selling a property in Spain: the tax and the 3 per cent

The deed is signed and the money has landed, but not all of it. Three per cent of the price never reached you: the buyer paid it straight to the Spanish tax office. There is often a second amount held back for the municipal plusvalía as well.

Both are correct, and both can be recovered or set off if you know how. Sellers who leave it alone leave money behind.

What Spain charges on the gain

The gain is taxed at 19 per cent. That rate applies to every non-resident, wherever they live.

That is worth saying plainly, because renting works differently. There, the EU and EEA line decides whether you pay 19 or 24 per cent and whether costs are deductible, as set out in our guide to non-resident property tax in Spain. On a sale that split does not exist. A seller resident in Lisbon, London or Los Angeles faces the same 19 per cent.

The gain is the sale price less the purchase price, with costs counting on both sides. On the way in, transfer tax or VAT, the notary, the registry and the agent. On the way out, the agent's commission, the plusvalía and the energy certificate. Keep those invoices, because without evidence the deduction disappears and the taxable gain rises.

The 3 per cent is a payment on account, not the bill

This is where most sellers go wrong. Many treat the three per cent as the final tax. It is not.

The buyer is obliged to withhold 3 per cent of the agreed price and pay it over on modelo 211, as a payment on account of your tax. They must then hand you the proof of that filing, carrying its reference number. Ask for it on the day of the deed, because without that number you cannot make your own return.

You then file modelo 210. The deadline is three months after a one-month period has run from the date of transfer, so four months from the deed in practice.

What happens next depends on the arithmetic. If 19 per cent of the gain exceeds the 3 per cent withheld, you pay the difference. If it is lower, you are owed a refund. That second case is commoner than people expect: on a property sold at a loss or a slim gain, 3 per cent of the whole price easily exceeds 19 per cent of a small gain. File nothing and that difference simply stays with the tax office.

The plusvalía, and why the buyer holds money back for it

The plusvalía municipal is the local tax on the increase in land value. Normally the seller pays it.

But article 106.2 of the local finance act makes the buyer the sustituto del contribuyente as soon as the seller is a non-resident individual. The town hall can pursue the buyer if you do not pay.

That is why a well-advised buyer withholds the amount at completion. It is not distrust, it is them covering their own exposure. What it is, though, is negotiable: have the figure calculated before the completion date rather than estimated on the day, because a generous estimate costs you money until it is settled.

The reinvestment relief, and why it usually does not apply

Spain exempts the gain where the proceeds of a main home are reinvested in another main home. For non-residents the relief is limited to those resident in an EU member state, or in Iceland, Norway or Liechtenstein.

The harder condition lies elsewhere. The property must have been your vivienda habitual in Spain. A holiday home is not that, however often you used it. The relief is aimed at someone who genuinely lived in Spain and is moving on, not at the sale of a second home.

Where it does apply, it is claimed in the return under code 33 if the reinvestment has already happened, or code 34 if it is still to come.

What your own country adds

Spain has taxed the gain. Whether anything more is due depends on which of two mechanisms your home country uses, and it is the same fork that governs rental income.

• Exemption with progression. The home country leaves the Spanish gain out of its own base. Much of continental Europe works this way, and several of those countries do not tax private capital gains on property at all. Where that applies, the Spanish 19 per cent is the entire bill and it is a real, final cost, because there is no home tax to relieve it against.
• Credit. The home country taxes the gain under its own rules and allows the Spanish tax as a credit, capped at its own tax on the same gain. The United Kingdom, Ireland and the United States all work this way.

In a credit country the practical effect is a top-up, and the size of it depends on the home rate rather than on anything Spanish.

United Kingdom

Capital gains tax runs at 18 or 24 per cent depending on where the gain falls against the basic rate band, with an annual exempt amount of £3,000 for 2026 to 2027. The separate, higher residential property rates were abolished in October 2024, so a Spanish flat is taxed at the same rates as any other asset.

Relief comes as a credit under article 22 of the 2013 treaty, capped at the UK tax on the same gain. At 24 per cent against Spain's 19, the credit normally absorbs the Spanish tax and you pay the difference at home. Where the gain is small or covered by the annual exemption, part of the Spanish tax can end up unrelieved.

One reporting point is widely got wrong. The 60-day report-and-pay deadline applies to UK residential property only. A Spanish sale goes on the ordinary self-assessment cycle, on the capital gains pages, with the credit claimed on the foreign pages.

Ireland

Capital gains tax is 33 per cent, with a personal exemption of €1,270 a year, and relief is a credit under article 23 of the 1994 treaty. Against Spain's 19 per cent that means a meaningful top-up.

Watch the calendar, because payment comes before the return. For a disposal between January and November, the tax is due by 15 December of the same year. For a disposal in December, by 31 January following. The return itself is not due until 31 October of the following year.

Residents who are not Irish domiciled are on the remittance basis for foreign gains, and are chargeable only on what is brought into Ireland.

United States

Citizens and residents are taxed on worldwide gains, at the long-term rates where the property was held for more than a year. A credit for the Spanish tax is generally available, though the rules that decide the source of a gain can limit how much of it can actually be used, so this is one to model rather than assume.

Two points catch American sellers. The net investment income tax of 3.8 per cent can apply to the gain on a second home, and the foreign tax credit cannot be used against it, so that layer is unrelieved. And the calculation runs in dollars: the purchase price is translated at the rate on the day you bought and the proceeds at the rate on the day you sold, so exchange-rate movement alone can create a taxable dollar gain where the euro gain was small or absent, leaving little Spanish tax to credit against it.

The exclusion available on the sale of a main home is unlikely to help, since a holiday home is not a principal residence.

What to arrange before completion

• Every purchase invoice: the deed, the tax, the notary, the registry, the agent
• The selling costs documented, including the energy certificate and the commission
• A calculation of the plusvalía, so the withholding is accurate rather than estimated
• An agreement that the buyer hands you the modelo 211 with its reference number
• Evidence that the annual returns were filed, because buyers almost always ask
• A power of attorney if you cannot attend the deed yourself

Frequently asked questions

I am selling at a loss. Do I still need to file?
Especially then. Without a return the 3 per cent stays with the tax office. With one, you get it back.

How long does a refund take?
Months rather than weeks. The clock only starts with your return, and you cannot file that until the buyer gives you the modelo 211.

I am over 65. Is the gain exempt?
That exemption exists, but it is for Spanish tax residents selling their main home. A non-resident selling a second home does not qualify.

We own it jointly. Do we file together?
No, each owner files for their own share under their own NIE number. The withholding and any refund split the same way.

Does the 19 per cent change if I live outside the EU?
No. Unlike the rate on rental income, the rate on a capital gain is the same for every non-resident. The EU and EEA line does not apply here.

Why Buenaley?

Buenaley is a Spanish law firm working with English-speaking sellers across Europe and beyond. We work out what is actually due before the deed, so the withholdings are right and the refund does not go unclaimed.

• Gain and plusvalía calculated before completion, not after
• Modelo 210 filed within the deadline, for every co-owner at once
• Refunds of over-withheld tax pursued until they arrive
• Fixed price, agreed in advance

Have a sale coming up, or one that completed without a return being filed? Send the deed and the purchase paperwork and you will hear what is recoverable or owing. Or start at the NIE page.