Guide to the 3% withholding tax for Non-Residents selling property in Spain

When a non-resident in Spain sells real estate located in the country, the purchaser of the property must withhold 3% of the purchase price and pay this amount to the Inland Revenue to cover the seller’s liability for capital gains tax.

Buyer obligations

Withholding 3% of the purchase price

The person acquiring the property is liable to withhold 3% of the purchase price and pay it to the Inland Revenue, regardless of whether they are a resident for tax purposes in Spain. This withholding is a payment on account of the seller’s tax on the gain obtained from the transfer.

Submission of form 211

The buyer must provide the non-resident seller with a copy of Form 211, which documents the payment of the withholding tax. This allows the seller to deduct the withholding from the tax payable when declaring the capital gain. If the amount withheld exceeds the tax finally payable, the excess is refundable.

Responsibility for payment of the withholding tax

If the withheld tax is not paid, the liability for the tax is attached to the property. Therefore, purchasers must ensure they withhold 3% of the purchase price. If they fail to do so, the Inland Revenue could request this amount in the future from the new owners of the property.

Tax declaration and payment

Form 210

Form 210 must be filed for the tax declaration. When the property being transferred is owned jointly by a married couple who are both non-residents, a single return may be filed.

Filing period

The filing period is three months from the end of the period in which the purchaser of the property must pay the withholding tax (which is one month from the date of sale). The tax rate is 19%.

Place of payment

Payment must be made at the branch or office of the Inland Revenue corresponding to the location of the property.

Refund of excess withholdings

Refund procedure

In cases where the amount withheld exceeds the actual tax payable, the taxpayer is entitled to a refund of the excess.

Submission of form 210 for refund

The refund procedure is initiated by filing Form 210 with the branch or office of the Inland Revenue corresponding to the location of the property. The refund is paid by bank transfer to the account indicated by the seller in the form. The account holder must be the taxpayer themselves or their representative. In the latter case, the document accrediting the appointment as representative (power of attorney) must expressly authorize them to receive the refund.

Requesting a refund by “cheque”

If the taxpayer does not have an account open in Spain, a refund by cheque may be requested by writing to the delegate of the Tax Office. However, this is not recommended due to the delay in issuing the cheque by tax authorities.

Required documentation

The refund application (Form 210) must always be accompanied by the copy “for the non-resident seller” of Form 211 used by the purchaser to pay the withholding tax.

Inland revenue timeframes

The Inland Revenue has six months from the refund filing deadline to issue a provisional settlement.

If the refund application is filed late, the six-month period runs from the filing date. If no administrative assessment is issued in that period, the Tax Authorities must refund the excess over the amount of tax self-assessed by the taxpayer without further action from the taxpayer. However, the Tax Authorities may perform subsequent assessments if appropriate.

If the aforementioned six months elapse and the refund order is not issued for reasons attributable to the Tax Authorities, interest will be paid on the outstanding refund amount (at a rate fixed for the year).