Selling property in Spain as a non-resident: understand the 3% withholding and what you can reclaim
Non-residents selling Spanish property face 3% withholding and IRNR capital gains tax. Reclaim overpaid withholding and reduce your liability with BMC.
Calculate your Spanish property capital gains- REAF
- ICAM
- 5 Offices in Spain
- 25+ Years
- 30+ Jurisdictions
The problem
Selling a property in Spain as a non-resident involves a tax mechanism that surprises almost every foreign seller: the buyer is legally required to withhold 3% of the sale price and pay it directly to the Spanish Tax Authority as a deposit against the seller's capital gains tax. For a property sold at 400,000 euros, that is 12,000 euros withheld at the moment of signing — regardless of what the actual gain is, or whether there is any gain at all. Many non-residents accept this withholding without question, unaware that they are entitled to file a final capital gains return within three months of the sale and receive a refund if the withholding exceeded the actual tax. Some sellers make losses on their Spanish property — particularly those who bought at peak prices before 2008 or paid significant acquisition costs — and are entitled to a full refund of the 3% withholding. Others have a gain but the correct tax is far less than 3% of the total sale price. Yet the refund process requires a correctly filed Modelo 210 and supporting documentation, and the AEAT will not issue refunds automatically.
Our solution
BMC manages the entire capital gains process for non-resident property sellers. We calculate the correct gain (or loss) by applying every eligible cost — acquisition price, purchase taxes, notary and registry fees, agency commissions, structural improvements with documented invoices — against the sale price. We determine the applicable rate under any relevant double tax treaty, prepare and file Modelo 210, and pursue the refund of any excess withholding from the AEAT. We also advise on reinvestment exemptions that may reduce or eliminate the capital gains liability entirely.
How we do it
Gain calculation and cost review
We reconstruct the acquisition cost base with every eligible addition: purchase price, ITP or IVA paid on acquisition, notary and land registry fees, agent's commission, legal fees, and the documented cost of permanent improvements since purchase. We subtract this enhanced cost base from the net sale proceeds to calculate the taxable gain.
Rate determination and treaty analysis
We confirm your country of residence and apply the relevant double tax treaty. For EU/EEA residents the standard IRNR rate on property capital gains is 19%. For residents of treaty countries the rate may be further reduced or the right to tax may be allocated entirely to the country of residence. We apply the most favourable position that is legally supportable.
Modelo 210 preparation and filing
We prepare and file the capital gains Modelo 210 within the three-month window following the sale date. The return must include the property identification, acquisition and disposal details, calculated gain, applicable withholding credit, and the refund claim or balance due. We prepare the full documentation package required to support the AEAT refund process.
Withholding refund pursuit
Where the 3% withholding exceeds the actual capital gains tax liability, we file the refund claim and manage the AEAT process through to payment. AEAT refunds typically take 3-9 months. We monitor progress, respond to any AEAT requests for additional documentation, and follow up if the standard processing time is exceeded.
We sold our apartment in Mallorca and the buyer's notary withheld 12,000 euros from our sale proceeds. BMC calculated our actual tax liability at just under 4,000 euros, filed the return, and recovered more than 8,000 euros from the Spanish tax office. The fee was a fraction of what we got back.
How capital gains tax works for non-resident property sellers
When a non-resident sells a Spanish property, two tax events occur simultaneously at the notaría:
-
The buyer withholds 3% of the sale price (not the gain — the entire price) and pays it to the AEAT within one month via Modelo 211. This is a mandatory advance against the seller’s tax liability.
-
The seller must file a Modelo 210 capital gains return within three months of the sale date, calculating the actual gain, applying the correct tax rate, crediting the withholding, and either paying the balance (if tax exceeds withholding) or claiming a refund (if withholding exceeds tax).
The widespread failure to file the Modelo 210 return means that many non-residents who have overpaid the 3% withholding never recover their money. The AEAT holds the excess indefinitely unless a formal reclaim is filed.
Calculating the gain: the cost base matters enormously
The taxable gain is the difference between the net adjusted sale price and the enhanced acquisition cost. Getting the acquisition cost right is the single most important step in minimising the capital gains liability.
The acquisition cost includes:
- Purchase price as stated in the original deed of sale
- ITP (Transfer Tax) paid on purchase — typically 6-10% depending on the autonomous community and year
- Notary fees on acquisition
- Land registry fees on acquisition
- Legal and agent fees on acquisition
- Cost of permanent improvements — extensions, structural works, kitchen or bathroom renovations with full invoiced documentation
The net sale price is the gross price minus agent’s commission and legal fees on sale.
For a property bought in 2010 for 200,000 euros with 20,000 euros in acquisition costs and sold in 2026 for 280,000 euros with 14,000 euros in sale costs, the taxable gain is 46,000 euros — not 80,000 euros. At 19%, the correct tax is 8,740 euros — against a 3% withholding of 8,400 euros. In this example, only a small balance is due. Without proper cost documentation, the apparent gain would be overstated and the tax significantly higher.
The three-month deadline: why it is non-negotiable
The Modelo 210 capital gains return must be filed within three months of the date of the notarial deed of sale. This is an absolute deadline — there is no annual filing window. Missing it creates a late-filing surcharge, and more practically, delays the refund indefinitely.
BMC begins the capital gains calculation process as soon as the sale date is confirmed, collecting all acquisition documentation and preparing the return in parallel with the sale completion so that it can be filed immediately after the deed is signed.
Special situations: inherited property, undivided shares, and multiple owners
Non-residents who sell inherited Spanish property face an additional complexity: the acquisition cost is typically the value declared for inheritance tax purposes, not a purchase price. Properties sold by multiple co-owners (siblings inheriting jointly, for example) require separate Modelo 210 returns for each non-resident owner. Undivided shares of property are valued pro-rata.
BMC has experience with all of these scenarios and with the Spanish notarial system, ensuring that the documentation chain from original acquisition to disposal is correctly reconstructed even when original purchase records are partial or unavailable.
Frequently asked questions
Related services
Take the first step
Request a no-obligation consultation and discover what we can do for your business.