The 3% withholding for non-resident sellers, explained

If you sell a property in Spain without being a tax resident there, one rule concerns you directly: the buyer is legally required to withhold 3% of the sale price and pay it to the Spanish tax authorities on your behalf. This withholding is not an additional tax, but an advance payment on the tax you might owe on the capital gain. Properly understood, there is nothing worrying about it.

Why the buyer withholds 3%

The Spanish administration wants to make sure that a non-resident seller does not leave the country without settling the capital gains tax. On the day of signing before the notary, the buyer therefore hands you only 97% of the price: the remaining 3% is declared via the Modelo 211 and paid to the Treasury within the month following the sale. You receive a receipt for this payment, which you should keep carefully.

What you actually owe

What happens next depends on your actual capital gain. This gain corresponds to the difference between your sale price and your purchase price, increased by documented costs and renovation works. The tax applicable to a non-resident seller, whatever their country, is the IRNR, at a rate of 19% on this net gain.

Refund or top-up

If the tax actually due is lower than the 3% already withheld, for example in the case of a small gain or a sale at a loss, you can claim a refund of the overpayment. If, on the contrary, the tax exceeds the 3%, you pay the balance. In the majority of sales without a large gain, the withholding works in your favour and gives rise to a refund.

Recovering the withholding: Modelo 210

Recovery is done by filing the Modelo 210, the non-resident income tax return, generally within three to four months of the sale. In it you declare the actual gain, attaching the purchase, sale and renovation supporting documents and the buyer's Modelo 211. Any refund is paid into an account, which makes it useful to have a Spanish bank account or a local representative.

Lead times to plan for

Refund times can reach several months, and the administration may request additional documents. This is why these steps are prepared in advance. These amounts and rates are indicative: a gestor confirms your exact situation. At Alveo Properties, we coordinate this procedure with a tax adviser so that the 3% withholding never stays stuck.