3% Withholding Tax for Non Residents
Non residents selling a property in Spain are not always easy to track down after the sale. For this reason the government makes the Buyer withhold 3% of the Purchase Price and pay it to the Treasury. This has to be done even when the Seller has made no profit from the sale.
Naturally, the Seller then gets to reclaim this amount. In a nutshell, the Seller pays using Form 211. You reclaim at end of calendar year (Jan 1st – 20th) using Form 210.
The Seller passes the Buyer a copy of the Form 211 so the Seller can deduct this amount from the amount to be paid resulting from the declaration of the gain. If the withheld amount is greater than the amount payable, the refund of the surplus can be obtained.
The tax has to be made by the Buyer because otherwise the property will be subject to the payment of the smaller amount of the withholding tax.
There are 3 main scenarios when deductions can be made: No gain, partial gain and a gain but the property was your permanent home and you’re rolling the gain into another permanent home. Naturally, this last example is a tad unusual for a non resident.
Tax return form
Form 210, approved by Order EHA/3316/2010 of 17 December, declaring income type 28. However, when the exemption for reinvestment in a permanent home is applied, the type of income will be declared as 33 or 34, as corresponds.
- on paper, generated as a result of printing the PDF form contained in the web portal of the Tax Agency.
- online, via Internet.
When the property is of shared ownership by a married couple in which both spouses are non-resident, unlike normal requirements, you can make a single self-assessment for both or you.
Term: three months from the end of the period which the purchaser of the property has to deposit the withholding retention (this period is, in turn, of one month from the date of the sale).
Refund of the withheld surplus
In the case of capital losses, or if the withholding made is greater than the liability which should have been deposited, the taxpayer is entitled to the refund of the withheld surplus. The refund procedure starts with the filing of the tax return form.
Treasury Accountability – Late Refund
The Tax Agency may apply a provisional settlement within the six months following the end of the established period for filing the return. When the return is filed late, the six months will be counted from the filing date. If the provisional settlement is not made within this six-month period, the Tax Administration will refund any surplus paid above the self-assessed amount. If you still haven’t got your refund back after six months from filing date and it is not your fault, you will get a late payment interest added to the amount pending refund.