SELLING A PROPERTY

Non-Resident Capital Gains Tax (IRNR)

Key Aspect	Details
Tax Rate	19% of the net profit for residents of the EU, Norway, Iceland, and Liechtenstein. 24% of the net profit for residents of all other countries (Non-EU/EEA).
Calculation	Net Profit = Selling Price - (Original Purchase Price + Applicable Costs).
Deductible Costs	You can deduct expenses related to the purchase (e.g., taxes, notary fees), the sale (e.g., solicitor fees, agency commission), and registered improvements/reforms.
Filing Form	Modelo 210 for capital gains.
Deadline	Must be filed and paid within four months of the date of the sale (date of the public deed).

3% Retention at Sale (Buyer`s Obligation)This is a critical mechanism for non-residents:

The Buyer Withholds: The person buying the property from you is legally obligated to withhold 3% of the sale price and pay this amount directly to the Spanish Tax Agency (Hacienda) on your behalf.

Payment on Account: This 3% acts as an advance payment towards your final Capital Gains Tax liability.

Refund/Payment: When you file your Modelo 210 within the four-month window:

1. If your final 19% (or 24%) tax liability is less than the 3% withheld, you will be due a refund of the difference.

2. If your final tax liability is more than the 3% withheld, you must pay the difference.

3. If you made a loss, you can apply for a full refund of the 3% withheld.

Municipal Capital Gains Tax (Plusvalía Municipal)

Key Aspect	Details
What is Taxed	The official increase in the value of the urban land (not the building) during the time you owned the property.
Liability	The seller is legally obliged to pay this tax.
Non-Resident Rule	When the seller is a non-resident, the buyer is legally responsible for paying this tax to the Town Hall, but they will typically withhold the estimated amount from the sale price to ensure it is paid.
No Gain, No Tax	If you can prove you made no actual profit on the entire property (sale price minus all costs), you may be exempt from paying this tax.
Deadline	Must be declared and paid within 30 working days of the date of the sale.

Annual Property Taxes (Prior Obligation)

Before Hacienda will process any tax refunds (such as a refund of the 3% retention), they will check that you are up-to-date on your annual taxes as a non-resident property owner.

1. Non-Resident Income Tax (IRNR): You must be current on the annual declaration (Modelo 210) for imputed income (deemed rental income) for the years you did not rent the property, as well as any rental income declared quarterly or annually.
2. Property Tax (Impuesto sobre Bienes Inmuebles - IBI): The seller is responsible for paying the IBI for the entire year of the sale, although this is often split proportionally with the buyer. You must ensure the tax has been paid to the Town Hall.

Given the complexities and the strict deadlines—especially the four-month limit for the Capital Gains declaration—it is essential to work with a professional advisor who can manage the calculations, deductions, and submissions of the various tax forms (Modelo 210 and the Plusvalía declaration) on your behalf.