Selling Spanish property: Why has my buyer held back 3% from the sale?
As you are a Non Resident seller of a Spanish property, the Buyer is obliged by law to deduct 3% from the sales price and pay this to the Spanish tax office on account of your capital gains tax. This payment has to be made within 30 days of the sale and the Buyer or their legal representative should then send you proof of the payment which is set out in a prescribed form called model 211.
In effect the Spanish tax office receive the 3% on account of any profit you have made on the sale of your Spanish property. You must then submit a Spanish tax return within three months of the payment of the 3% withholding tax. In practice, this means that the tax return is filed within four months of the completion date of the sale.
If you have made a loss on the sale of your Spanish property after the deduction of all of the costs of purchase and all of the costs of sale, then you prove this to the Spanish tax office and they will refund the 3% in its totality or partially. They may only return a part of the amount to you if you have not been paying your yearly Non Resident Income taxes. These are the annual taxes you have to pay the year after you purchased the property.
If you have made a gain, then the current rate of Spanish tax for personal capital gains is 19% and unfortunately you also have to report the Spanish gain in your home country.
My Lawyer in Spain has a dedicated team of lawyers and tax specialists who can help you complete the sale of your Spanish property and submit the correct tax declarations.
