Where taxpayers get caught out
Many sellers forget that the 3% is only an advance. If the real tax is higher, the difference must be paid within the deadline; if lower, the refund must be claimed. Doing nothing means either a penalty or a lost refund.
How the gain is calculated
| Item | Treatment |
|---|---|
| Sale price | As stated in the deed |
| Selling costs | Agent's commission, plusvalía, legal fees, energy certificate |
| Purchase price | As stated in the purchase deed |
| Purchase costs | Transfer tax or VAT, notary, registry, legal fees |
| Improvements | Documented works that added value |
| Depreciation | Deducted if the property was rented and depreciation was claimed |
The 3% retention
The buyer pays 3% of the price to the tax agency on the seller's behalf within one month, using the modelo 211. The seller's return then compares the real tax with that 3%. See the 3% retention explained.
Deadline and refunds
The seller files the modelo 210 within three months after the buyer's one-month deadline, in practice four months from the sale. If the 3% exceeds the tax, the refund is claimed in the same return and paid to a bank account, which can take several months.
Plusvalía municipal
Separately, the town hall taxes the increase in land value. It is normally paid by the seller and is deductible as a selling cost. See plusvalía.
Residents and exemptions
Residents are taxed on the savings scale instead and may be exempt when reinvesting in a new main home or if over 65. EU and EEA non-residents can, in some cases, apply the reinvestment exemption too. See the main home exemption.
An illustrative example
Based on situations we commonly see; not a specific client. A Swedish seller sold a villa in Calvià for 1.2 million euros, bought for 800,000. The buyer withheld 36,000 euros. After adding purchase costs, documented renovations and selling costs, the real gain was 240,000 euros and the tax 45,600 euros; the seller paid the 9,600 difference on time.
How Castell.tax can help
We file the Spanish taxes of non-resident owners every year: imputed income, quarterly rental returns, the tax on a sale and the refund of the 3% retention. We work in English and German, by email and video call, so you never need to travel to Spain. We also check past years and correct them before the tax agency writes to you. See our non-resident tax service or contact us for a fixed-fee quote.
This page is published by Castell.tax, the tax practice of Castell.law in Palma de Mallorca. It is general information; tax rules and rates change, so check your case with us before filing.
Not sure what you owe? Ask before the deadline
Send us your situation or the letter you received. A tax adviser will tell you what applies, what it could cost and what to file.
Frequently asked questions
What rate do non-residents pay on property gains?
19% on the gain.
Is the 3% the final tax?
No, it is an advance; the seller files a return to settle the difference.
Can I deduct renovation costs?
Yes, documented improvements increase the acquisition value.
What if I sell at a loss?
No tax is due, and the whole 3% can be claimed back.