The Two-Step Tax Process When a Non-Resident Sells Spanish Property
Step 1 — The Buyer’s Obligation (Form 211)
The buyer withholds 3% of the gross purchase price at completion and pays it to the AEAT using Form 211 within 30 days of the date of the notarial deed (escritura). This is a payment on account of the seller’s potential capital gains tax.
Step 2 — The Seller’s Obligation (Form 210)
The seller must file Form 210 (capital gains variant) within approximately 4 months of the deed date (specifically: 3 months after the buyer’s 30-day Form 211 deadline = approximately 4 months total). This calculates the actual capital gains tax.
CRITICAL: If Form 210 is NOT filed within the deadline, the AEAT keeps the entire 3% permanently. It is not returned automatically. This is one of the most expensive mistakes non-resident sellers make.
Timeline for a Non-Resident Property Sale
| Timing | Action | Notes |
|---|---|---|
| Day 0 | Deed of sale (escritura) signed at notary | Both buyer and seller present |
| Day 1–30 | Buyer pays 3% via Form 211 to AEAT | Buyer’s obligation — mandatory |
| Day 1–30 | Buyer also files/pays Plusvalía Municipal to local town hall | Buyer acts as substitute taxpayer |
| ~Day 120 (4 months) | DEADLINE: Seller files Form 210 (capital gains) with AEAT | THIS IS THE CRITICAL DEADLINE |
| After Form 210 | AEAT processes refund (if 3% withheld > actual tax due) | Typically 3–9 months for refund |
| After Form 210 | AEAT issues demand for additional payment (if actual tax > 3% withheld) | Must be paid within the demand deadline |
Capital Gains Tax Rates 2026
| Country of Residence | Capital Gains Rate |
|---|---|
| EU residents (Germany, France, Netherlands, Italy, etc.) | 19% |
| EEA non-EU residents (Norway, Iceland) | 19% |
| UK residents (post-Brexit) | 24% |
| US, Canada, Australia, Israel, Switzerland | 24% |
| All other non-EU countries | 24% |
Calculating Your Capital Gains Tax
CAPITAL GAIN = Transfer Value − Acquisition Value (adjusted)
Transfer Value (What You Sold For)
Sale price from deed, LESS:
- Seller’s estate agent commission
- Notary and Land Registry fees at sale
- Lawyer/legal fees for the sale
- Plusvalía Municipal paid by seller (if applicable)
Acquisition Value (What You Originally Paid, Adjusted)
Original purchase price from deed, PLUS:
- ITP (or VAT+AJD for new builds) paid at purchase
- Notary and Land Registry fees at purchase
- Lawyer/legal fees at purchase
- Documented capital improvements (kitchen remodels, extensions, pool — with facturas and planning licenses)
- Estate agent commission at purchase
TAX = Capital Gain × applicable rate (19% or 24%)
If Tax < 3% of sale price → AEAT refunds the difference. If Tax > 3% of sale price → seller pays the balance. If there is NO gain (sold at a loss) → zero capital gains tax; full 3% can be reclaimed.
Worked Example: UK Resident Selling in Valencia (2026)
Scenario
- Sale price: €350,000
- Original purchase price (2018): €240,000
- ITP paid at purchase: €24,000 (10%)
- Notary + registry fees at purchase: €2,000
- Lawyer fees at purchase: €2,400 (1%)
- Kitchen renovation (2021, with facturas + licence): €18,000
- Estate agent commission (3.5% of sale): €12,250
- Notary + registry fees at sale: €1,200
- Lawyer fees at sale: €1,500
Calculation
- Acquisition value: €240,000 + €24,000 + €2,000 + €2,400 + €18,000 = €286,400
- Transfer value: €350,000 − €12,250 − €1,200 − €1,500 = €335,050
- Capital gain: €335,050 − €286,400 = €48,650
- CGT at 24% (UK resident): €48,650 × 24% = €11,676
- 3% buyer retention: €350,000 × 3% = €10,500
Result: CGT (€11,676) > Retention (€10,500) → seller pays additional €1,176 to AEAT when filing Form 210.
Without claiming all deductible costs (worst case — only purchase price declared): Apparent gain: €110,000. CGT: €26,400 vs. €11,676 with full deductions = overpayment of €14,724 — avoidable with proper advice.
Complete List of Deductible Costs
| Cost | Deductible? | Notes |
|---|---|---|
| ITP / VAT+AJD paid at purchase | YES | Adds to acquisition value |
| Notary fees at purchase | YES | Adds to acquisition value |
| Land Registry fees at purchase | YES | Adds to acquisition value |
| Lawyer fees at purchase | YES | Adds to acquisition value |
| Estate agent commission at purchase | YES | Adds to acquisition value |
| Capital improvements (kitchen, extension, pool) | YES | REQUIRES: official facturas + planning licence |
| Mortgage arrangement costs at purchase | YES | Notary + registry + bank fees |
| Notary fees at sale | YES (from transfer value) | Reduces transfer value |
| Land Registry fees at sale | YES (from transfer value) | Reduces transfer value |
| Lawyer fees at sale | YES (from transfer value) | Reduces transfer value |
| Estate agent commission at sale | YES (from transfer value) | Reduces transfer value |
| Mortgage cancellation costs at sale | YES (from transfer value) | Notary + registry fees |
| Routine maintenance (painting, cleaning, repairs) | NO | Not capital in nature |
| IBI paid over the years | NO | Deductible against rental income only |
| Works paid without factura | NO | AEAT does not accept unreceipted payments |
| Foreign contractor receipts | NO | Must be Spanish facturas with valid CIF |
Plusvalía Municipal: The Buyer Pays for Non-Residents
The Plusvalía Municipal (IIVTNU — Impuesto sobre el Incremento de Valor de los Terrenos de Naturaleza Urbana) is a local tax on the increase in the land value (not the building value) during the period of ownership. It is paid to the local town hall — NOT to the AEAT.
KEY RULE FOR NON-RESIDENTS: When the seller is a non-resident, the buyer becomes the substitute taxpayer (sustituto del contribuyente) under Article 106.2 of the TRLHL. The buyer pays the Plusvalía to the town hall within 30 days.
In practice: the Plusvalía amount is calculated, agreed between buyer and seller at the notary, and deducted from the sale price. The buyer files and pays it to the town hall on the seller’s behalf.
When Is Plusvalía Zero?
Following Constitutional Court rulings, no Plusvalía is due when:
- There has been no actual increase in the land value, OR
- The seller makes a loss (sale price < purchase price)
Two calculation methods exist: the objective method (based on cadastral value × years × coefficient) and the real method (actual gain on land). The seller can choose whichever produces a lower tax. Lextax calculates both methods to determine the most favourable approach.
Frequently Asked Questions
What is the 3% retention in Spain for non-residents selling property?
When a non-resident sells Spanish property, the buyer must withhold 3% of the gross sale price and pay it to the AEAT using Form 211 within 30 days. This is an advance payment on the seller’s capital gains tax — NOT a final settlement.
How long do I have to file Form 210 after selling my Spanish property?
Approximately 4 months from the date of the notarial deed — specifically, 3 months after the buyer’s 30-day Form 211 deadline. If Form 210 is not filed within this period, the AEAT keeps the entire 3% permanently, with no obligation to return it.
If I sell at a loss, can I recover the 3% retention?
Yes — if there is no capital gain (or a capital loss), no CGT is due and you are entitled to a full refund of the 3% withheld. You must file Form 210 within the deadline to claim this refund.
What rate of capital gains tax do UK residents pay in Spain?
24%. UK residents are non-EU and pay the non-EU IRNR rate on capital gains from Spanish property sales.
Who pays the Plusvalía Municipal when the seller is a non-resident?
The buyer acts as the substitute taxpayer and pays the Plusvalía Municipal directly to the local town hall. In practice, the amount is deducted from the sale price at completion.
Can I deduct the cost of renovation works from my capital gain?
Yes — but only capital improvements (not routine maintenance), and only if you have official Spanish facturas (invoices with the contractor’s CIF) and, where required, planning licences. Informal payments or foreign receipts are not accepted.
Let Lextax Manage Your Spanish Property Sale
Every property sale is different — the difference between proper advice and DIY can be tens of thousands of euros.
- Full capital gains tax calculation — all deductible costs identified and claimed
- Form 210 preparation and AEAT filing within the 4-month deadline
- Refund tracking and AEAT communication on your behalf
- Plusvalía Municipal calculation and coordination with buyer
- Pre-sale documentation review — gather all facturas and purchase documents before sale completes
- Double taxation analysis for your home country (UK, US, Germany, France, etc.)
- Outstanding Form 210 regularisation for prior years
