Capital Gains Tax When Selling Spanish Property as a Non-Resident: The Rules You Need to Know

Capital Gains Tax When Selling Spanish Property as a Non-Resident: The Rules You Need to Know

If you're a foreign owner planning to sell your apartment in Málaga, villa on the Costa Blanca, or rustic finca in Andalucía, capital gains tax (CGT) is the single biggest line item you'll face at closing. Spain treats non-residents differently from residents, and the rules combine a fixed CGT rate, a mandatory 3% retention withheld by the buyer, and — potentially — the notorious plusvalía municipal on top. Here's how it actually works, what you'll pay, and where sellers most often trip up.

Tax law changes. Every figure and procedure below should be confirmed with the Agencia Tributaria (AEAT) or a licensed Spanish asesor fiscal or abogado before you sign anything. This guide is educational, not legal or tax advice.

The Headline Rate: 19% for Most Non-Residents

For non-resident individuals, capital gains on the sale of Spanish real estate are taxed at a flat 19% under the Impuesto sobre la Renta de No Residentes (IRNR) — provided you are resident in the EU, EEA, or a country with an equivalent information-exchange agreement (this includes most Western European countries).

For non-residents from outside the EU/EEA — historically including many third countries — the rate has been higher (24% has applied to certain other income, and CGT treatment has evolved). Confirm your specific rate with an asesor fiscal, because it depends on your tax residence and current bilateral agreements. Post-Brexit UK residents, US and Canadian citizens, and other non-EU sellers should not assume the 19% rate applies automatically without checking.

The gain (ganancia patrimonial) is calculated as:

Transfer value − Acquisition value = Taxable gain

Where:

• Transfer value = sale price minus costs of sale you paid (agent commission, plusvalía if you paid it, legal fees, energy certificate, etc.).
• Acquisition value = original purchase price plus costs you paid when buying (ITP or VAT, notary, registry, legal fees) plus documented capital improvements (not routine maintenance).

Spain no longer applies inflation adjustment (coeficientes de actualización) to real estate for individuals — that was removed years ago. What partially survives is the régimen transitorio with reduction coefficients (coeficientes de abatimiento) for properties acquired before 31 December 1994, which can reduce the taxable gain on the portion accrued up to January 2006. If you inherited or bought your Spanish home in the 1980s or early 90s, ask your asesor to run that calculation — it can be very valuable.

The 3% Retention: What Buyers Withhold at Closing

This surprises almost every first-time non-resident seller. Under Article 25.2 of the IRNR law, the buyer is legally required to withhold 3% of the agreed sale price and pay it directly to the Agencia Tributaria using Form 211 within one month of the sale.

That 3% is a payment on account of your CGT — not an extra tax.

• If your actual CGT liability is more than the 3% retained, you pay the difference.
• If your actual CGT liability is less than the 3% retained (or you sold at a loss), you claim a refund.

You (the seller) file Form 210 within four months of the sale to declare the actual gain and either settle the balance or request the refund. Refunds can take 6–18 months in practice, so don't count on that cash quickly.

Practical tip: the 3% is calculated on the declared deed price, not the gain. On a €400,000 sale, that's €12,000 the buyer's lawyer will hold back at the notary and remit to Hacienda.

Plusvalía Municipal: The Second Tax You'll Owe

Separately from state CGT, you may owe the Impuesto sobre el Incremento del Valor de los Terrenos de Naturaleza Urbana — known as plusvalía municipal — to the town hall (ayuntamiento) where the property sits.

Key points:

• It applies only to urban land, not rural (rústica).
• It taxes the increase in the cadastral land value during your ownership.
• After the Constitutional Court struck down the old formula, the current system (introduced by Royal Decree-Law 26/2021) lets you choose between an objective method (based on cadastral value and coefficients) and a real-gain method (based on the actual increase in land value). Pick whichever gives the lower bill.
• If you can prove you sold at a loss, plusvalía is not due — but you must document it.
• The seller pays it (unless contractually shifted). Rates and coefficients vary by municipality.

Always ask your abogado for a plusvalía estimate from the ayuntamiento before you sign the deed. Amounts range from a few hundred euros to tens of thousands on long-held urban plots.

Step-by-Step: Selling as a Non-Resident

1. Gather your paperwork. NIE, passport, original title deed (escritura), latest IBI receipt, community-fee certificate, energy performance certificate (CEE), cédula de habitabilidad or licence of first occupation, and — critically — proof of what you paid when you bought and evidence of improvements (invoices with your name and NIF).
2. Appoint a Spanish abogado or gestor. Independent from the buyer's side. They'll draft the sale contract, coordinate with the notary, and file Form 210.
3. Sign the *contrato de arras* (deposit contract, typically 10%). This locks the deal.
4. Complete at the notary. The buyer's side deducts the 3% retention and files Form 211; the notary provides a certified copy of the deed.
5. File Form 210 within four months, paying any balance or claiming the refund.
6. Pay plusvalía municipal within 30 days at the ayuntamiento (or your abogado does it).
7. Cancel domiciliations — IBI, community fees, utilities, and non-resident income tax (Form 210 modelo anual, which you were filing every year you owned but didn't rent, right?).

Who Pays What at Closing

• Seller pays: agent commission (typically 3–6% + IVA, negotiable), plusvalía municipal, energy certificate, any mortgage-cancellation notary/registry fees, capital gains tax.
• Buyer pays: ITP (Impuesto de Transmisiones Patrimoniales, generally 6–10% depending on region, on resales) or 10% VAT + AJD on new-builds, notary, registry, and their own legal fees. The buyer also funds the 3% retention out of the price they hand over.

Common Pitfalls

• Not filing your annual Form 210 while you owned the place. Non-residents owe an imputed-income tax even if the home sat empty. Hacienda can and does chase it before releasing your refund.
• Missing acquisition invoices. Without proof of what you paid and improved, your acquisition value defaults low, and your taxable gain balloons. Keep everything, scanned.
• Assuming a double-tax treaty exempts you. Treaties usually give Spain the primary right to tax gains on Spanish real estate; your home country then credits the Spanish tax. You still pay in Spain first.
• Under-declaring the sale price. Notaries and Hacienda cross-check against the valor de referencia cadastral value. Under-declaration triggers audits, penalties, and can invalidate later refund claims.
• Forgetting the 3% is on the price, not the gain. Even if you're selling at a loss, the buyer still withholds 3% — you must file Form 210 to get it back.

Short FAQ

Do I need to travel to Spain to sell? No. A notarised, apostilled Power of Attorney (poder de venta) lets your abogado sign for you.

Can I offset losses from other Spanish property? Capital losses on real estate can generally offset capital gains within the same tax period, subject to limits. Ask your asesor.

What if I reinvest in a new main home? The reinversión en vivienda habitual exemption is for tax residents selling their main home. Non-residents generally can't use it — though EU/EEA residents may qualify under specific conditions if the sold property was their habitual residence. Verify with a professional.

Is inheritance tax due if I inherited the property? That's a separate regime (ISD), not CGT — but your acquisition value for CGT purposes will be the value declared for inheritance tax, which matters enormously.

Bottom line: budget for 19% CGT on your real gain, plan for the 3% cash retention at closing, get a plusvalía estimate before signing, and hire your own independent abogado. Then confirm every euro with the Agencia Tributaria or a licensed asesor fiscal — because the rules do shift, and getting them wrong is expensive.