Selling your home in Spain is usually a happy event – but many Nordic and international owners are caught off guard by the tax on the gain, and by the 3% the buyer withholds on the very day of completion. This article explains how capital gains tax works when you are not a tax resident in Spain, so you know what you will actually walk away with.
What is taxed?
When a non-resident sells a property in Spain, you pay tax on the gain – the difference between what you paid when you bought and what you sell for. The gain is declared on form Modelo 210. For sellers resident in the EU/EEA (which includes Sweden, Norway, Denmark, Finland and Iceland), the rate is 19% on the net gain.
How the gain is calculated
The taxable gain is not the whole sale price, but the difference between the transfer value and the acquisition value. The good news is that you can deduct a range of costs, which lowers the gain and therefore the tax:
- The transfer tax (ITP) or VAT you paid when buying
- Notary, land registry and lawyer fees on both purchase and sale
- The estate agent’s commission on the sale
- Value-adding renovations – provided you have invoices
A worked example
Suppose you bought a villa for €200,000 and now sell it for €300,000. On purchase you paid around €20,000 in taxes and fees, and you have spent €15,000 on a value-adding renovation. The agent charges €9,000 on the sale.
Acquisition value: 200,000 + 20,000 + 15,000 = €235,000. Deductible on sale: €9,000. Taxable gain: 300,000 − 235,000 − 9,000 = €56,000. Tax at 19%: €10,640. Without the deductions, the gain would be taxed as €100,000 – almost double. Keeping every invoice clearly pays off.
The 3% the buyer withholds
This is where many people are surprised. When the seller is a non-resident, the buyer is required by law to withhold 3% of the purchase price and pay it to the tax authority (on form Modelo 211). It is an advance payment of your capital gains tax – not an extra charge. On a €300,000 sale, €9,000 is withheld and you receive €291,000 on completion day.
When you then declare the gain on Modelo 210, the 3% is credited against your tax. If your actual tax is lower than the amount withheld – or if you even make a loss – you are entitled to a refund of the difference. In the example above the tax is €10,640, more than the €9,000 withheld, so you pay the remaining €1,640. But on a smaller gain or a loss, much of that €9,000 can come back.
Don’t forget plusvalía municipal
In addition to capital gains tax, the town hall levies its own tax – plusvalía municipal – on the increase in the land value during your ownership. It is paid separately and calculated differently. Together, these two taxes make up the total tax cost of a sale.
Legal basis and deadlines
The rules come from the Non-Resident Income Tax law (Impuesto sobre la Renta de no Residentes, IRNR). Modelo 210 to declare the gain must normally be filed within four months of the sale date. The buyer’s 3% payment is due within one month. Meeting the deadlines matters – especially if you have money to reclaim.
Estimate your gain in advance
Want to see roughly how much tax you would pay before you sell? Use our free capital gains calculator: colas-abogados.com/verktyg/kapitalvinst. It gives a first estimate, but every sale is unique – we always recommend an individual review before you sign.
At Colás Abogados we represent Nordic and international property owners through the entire sale: we calculate the gain, handle Modelo 210 and 211, and make sure you recover any excess of the 3% withheld.
Kontakta oss / Contact us / Contáctenos:
Email: [email protected]
Phone: +34 629 549 430
Web: www.colas-abogados.com