Selling a Spanish property as a non-resident involves two critical and closely sequenced tax events: the 3% withholding that the buyer deposits with AEAT at the time of signing, and the actual capital gains tax declaration (Modelo 210) that the seller files within three months. Getting the sequence right — and claiming any refund of excess withholding before the four-year statute of limitations expires — can make a significant financial difference. This guide explains the complete process, the actual tax rate, and the most common mistakes.
The 3% Withholding Mechanism: Why It Exists and How It Works
Article 25.2 of Spain’s Non-Resident Income Tax Law (LIRNR, Royal Legislative Decree 5/2004) establishes the buyer’s withholding obligation when purchasing a property from a non-resident seller. The rationale is straightforward: the IRNR is difficult to collect from a taxpayer who does not reside in Spain and may have no further Spanish tax obligations after the sale. The withholding ensures that Spain collects at least a portion of the tax before the non-resident seller leaves the jurisdiction.
The mechanism works as follows:
- At the time of the public deed: the buyer withholds 3% of the deeded purchase price.
- Within 30 days of the deed: the buyer files Modelo 211 and deposits the withholding with AEAT.
- Within 3 months of the deed: the non-resident seller files Modelo 210 to declare the actual capital gain and settle the IRNR.
- If the withholding exceeds the actual tax (or if there is a loss): AEAT refunds the excess to the seller.
- If the withholding is less than the actual tax: the seller must pay the difference.
A Worked Example
Property sold by: Sarah, Irish citizen, non-resident in Spain. Declared sale price: €300,000
Buyer’s withholding (3%): €9,000 — deposited with AEAT via Modelo 211.
Acquisition cost (purchase price + acquisition expenses): €200,000 Documented improvements: €15,000 Sale-related expenses (agent + seller’s notary fees + municipal capital gains tax): €8,000
Capital gain: €300,000 − €200,000 − €15,000 − €8,000 = €77,000 Tax (19% × €77,000): €14,630
Withholding already deposited: €9,000 Balance to pay: €5,630 (Sarah must pay this amount when filing Modelo 210)
If the acquisition cost or improvements had been higher, the gain would decrease, and the 3% withholding (€9,000) might exceed the actual tax — generating a refund.
The 19% Rate: For All Non-Residents Without Exception
Article 25.1.f.3 of the LIRNR establishes clearly that capital gains from the transfer of Spanish real estate are taxed at 19% for all IRNR taxpayers, regardless of their country of residence.
This point frequently causes confusion because a 24% rate also exists within the IRNR framework. It is essential to understand when each rate applies:
| Rate | When It Applies |
|---|---|
| 19% | Capital gains from Spanish property sales (always, for all non-residents) |
| 19% | Dividends, interest, royalties — for EU/EEA residents (Art. 25.1.f LIRNR) |
| 24% | Employment income, business income, rental income — for third-country residents WITHOUT a double taxation treaty |
| 19% | Employment income, business income, rental income — for EU/EEA residents |
The 24% rate never applies to capital gains from a property sale. The confusion arises because the 24% does apply to rental income received by non-residents from third countries without a double taxation treaty. But for the property sale itself, the rate is always 19%.
UK Post-Brexit and the 19% Rate
After the UK left the European Union, UK residents became “third-country” residents for Spanish IRNR purposes. This affected some income categories — most notably rental income, which for UK property owners who are non-resident in Spain increased from 19% to 24%.
However, for capital gains from property sales, the rate remains 19% for UK residents — unaffected by Brexit. Article 25.1.f.3 LIRNR sets 19% for property capital gains without distinguishing between EU, EEA, UK, or other third-country residents.
The Spain-UK Double Taxation Treaty of 2013 (in force) provides in Article 13 that Spain may tax capital gains on property located in Spain. This confirms that the domestic 19% rate applies normally to UK sellers — no lower treaty rate overrides it for property capital gains.
Calculating the Capital Gain: Components and Deductions
Transfer Value
The transfer value is the price stated in the public deed, minus the following seller-borne expenses:
- Real estate agent commission on the sale.
- Municipal Capital Gains Tax (IIVTNU / “plusvalía municipal”) — note that following the Constitutional Court judgment of 26 October 2021, this tax may not be payable when there is no real increase in land value, or an alternative calculation method may produce a lower figure.
- Notary and land registry fees charged to the seller under the deed.
- Other expenses directly related to the sale.
Acquisition Cost
The acquisition cost is the original purchase price, plus:
- Taxes paid on acquisition (IVA if a new-build from a developer; ITP if a resale).
- Notary and land registry fees paid on purchase.
- Real estate agent commission paid on purchase (if applicable).
- Documented cost of improvements made during the ownership period — strictly capital improvements, not maintenance or repair costs.
Specific Adjustments for Previously Rented Properties
If the property was rented out during the ownership period and the owner declared (or should have declared) rental income in the IRNR, the acquisition cost must be reduced by the tax-depreciation that accrued during the rental period. For each year of rental, the depreciation base is the greater of the acquisition value of the building (excluding land, which does not depreciate) or the cadastral value of the building, and the depreciation rate is 3% per year. This adjustment can significantly reduce the acquisition cost and increase the taxable gain — a frequently overlooked adjustment that can increase the tax liability for former rental property owners.
Transitional Abatement Coefficients (Pre-1995 Acquisitions)
For properties acquired before 31 December 1994, transitional abatement coefficients may reduce the portion of the gain generated up to 20 January 2006. These coefficients do not apply to the portion of the gain generated after that date. The calculation requires splitting the total gain into two time periods and applying the coefficients only to the pre-January 2006 portion.
Since 2015, no monetary update coefficients are available for any property, regardless of acquisition date. This relatively disadvantages long-term owners compared to the pre-2015 position.
Modelo 211: The Buyer’s Withholding Declaration
Modelo 211 (“Non-Resident Income Tax. Acquisition of real property from non-residents without permanent establishment. Withholding”) is the form filed by the property buyer to deposit the 3% withholding with AEAT on account of the seller’s IRNR.
Modelo 211 Data Requirements
Modelo 211 requires:
- Buyer’s identification (NIF, name/company name).
- Seller’s identification (NIE/NIF if available, name, country of residence).
- Property description (cadastral reference, address).
- Purchase price per the deed.
- Withholding amount (3% of the price).
- Date of the public deed of sale.
Filing Deadline
Modelo 211 must be filed within one calendar month of the date of the public deed of sale, filed electronically via the AEAT electronic office.
Consequences of Not Filing Modelo 211
If the buyer fails to file Modelo 211 or files for an incorrect amount, they become subsidiarily liable for the non-resident seller’s IRNR up to the amount they should have withheld — plus interest and surcharges. AEAT can pursue the buyer for the seller’s tax years after the transaction, creating an unexpected liability.
Modelo 210: The Non-Resident Seller’s Declaration
Modelo 210 is the IRNR declaration filed by the non-resident seller to settle the actual tax on the capital gain and, where applicable, claim a refund of excess withholding.
Modelo 210 Filing Deadline
Modelo 210 for property transfers must be filed within 3 months of the date of the public deed. This is a hard deadline: late filing triggers a surcharge.
If the declaration shows a refund (3% withholding exceeds the IRNR): AEAT has 6 months to process the refund. If no decision is issued within that period, interest accrues in the taxpayer’s favour.
If the declaration shows an amount due (IRNR exceeds the 3% withholding): payment must be made simultaneously with filing Modelo 210.
Refund Right: 4-Year Statute of Limitations
The right to claim a refund of excess withholding expires 4 years after the day following the end of the Modelo 210 filing deadline. For example, if the deed was signed in June 2022, Modelo 210 was due by 30 September 2022, and the right to a refund expires on 30 September 2026.
This 4-year statute of limitations is the most common timing mistake: non-resident sellers who think they have unlimited time to claim their refund lose that right permanently once the deadline passes.
Special Case: Capital Loss on the Sale
If the non-resident seller sells the property for less than the acquisition cost (a capital loss), the taxable gain is zero and therefore the IRNR is also zero. In this case, the entire 3% withholding already deposited by the buyer is recoverable. The seller must still file Modelo 210 (showing zero IRNR) to claim the full withholding refund.
Coordination With the Municipal Capital Gains Tax (IIVTNU)
Spain’s capital gains tax on the IRNR and the Municipal Capital Gains Tax (Impuesto sobre el Incremento del Valor de los Terrenos de Naturaleza Urbana — IIVTNU, known as “plusvalía municipal”) are two separate taxes on the same transaction. The IIVTNU is a municipal tax on the increase in the cadastral value of the land — not on the seller’s actual profit.
Following the Constitutional Court judgment of 26 October 2021 — which declared unconstitutional the IIVTNU calculation method when no actual gain existed or when the tax exceeded the actual gain — sellers now have an option to demonstrate that the actual increase in land value is lower than the figure produced by the municipality’s objective formula.
The IIVTNU paid by the seller is a deductible expense in the IRNR capital gain calculation (as part of the transfer value). The coordination between both taxes must be carefully managed to avoid double-counting deductions.
The BMC Process for Non-Resident Spanish Property Sales
At BMC, we coordinate the complete tax process for non-resident property sales:
- Pre-deed assessment: estimated capital gain and IRNR calculation so the seller knows their tax position before signing.
- Coordination with notary and buyer: confirming the seller’s NIE/NIF for Modelo 211 compliance.
- Modelo 210 filing within the 3-month deadline: settling the actual IRNR and claiming any refund.
- Refund monitoring: correspondence with AEAT until the refund amount is received in the seller’s bank account.
- Annual IRNR coordination: verifying that the capital gain is correctly integrated in the context of any other Spanish-source income in the tax year.
The Spain Expat Tax Guide 2026 includes Spanish property taxation within the complete analysis of non-residents’ tax position in Spain. For a specific consultation on your Spanish property sale, our team can prepare an IRNR simulation before the deed date.
Sources
- LIRNR — Royal Legislative Decree 5/2004 — BOE-A-2004-4527
- IRNR Regulations — Royal Decree 1776/2004 — BOE-A-2004-19200
- Order EHA/3290/2008, Modelo 211 — BOE-A-2008-19657
- Order HAP/2488/2014, Modelo 210 — BOE-A-2014-13358
- Spain-UK Double Taxation Treaty 2013 — BOE-A-2014-3428
- AEAT — IRNR capital gains on property — sede.agenciatributaria.gob.es
