At Welex, a firm of lawyers and economists in La Costa del Sol Spain, we recognize the legal challenges faced by non-residents when selling a property in Spain. In this blog, we will discuss in detail the taxes and duties on the sale of property by non-residents in Spain.

If you are a non-resident in Spain and have decided to sell your property, you should be aware of two payments that need to be taken into account after the sale of property by non-residents in Spain:

1. On the one hand: the payment of the capital gains tax.
2. On the other hand: the payment of the plusvalia tax in Spain.

1. Capital gain from a sale as a non-resident

When an individual buys a property in Spain and the seller is a non-resident, the buyer must withhold and pay on behalf of the seller 3% of the sale price as an advance payment of the non-resident income tax to the Tax Agency. However, this withholding is not necessary if the seller can prove that he is subject to personal income tax (IRPF) by means of a certificate issued by the Spanish tax authorities, i.e., that he is a tax resident in Spain.

The capital gain will be determined by the difference between the transfer value of the property and its acquisition value.

• The transfer value of the property will be the sale price, from which the expenses and taxes inherent to the transfer paid by the seller in Spain will be subtracted.
• The acquisition value will be the purchase price of the property, to which the expenses and taxes inherent to the acquisition will be added.
• The gain due to the difference between the transfer value and the acquisition value will be taxed at the rate of 19%, being this the amount to be paid, after deducting the amount corresponding to the 3% withholding.

In the event that there is no gain on the sale of the property in Spain, the seller is entitled to request a refund of the 3% paid by the buyer.

For a better understanding, we will use an example from our office:

A non-resident,

• Has a house that has been sold for 600.000€ in 2024 and which selling expenses amount to 45.433,29€.
  • Transfer value: 554.566,71€.
• The house, which was purchased for 320,000 in 2010; whose purchase costs were 27,644.74€.
  • Acquisition value: 347.644,74€.
• The gain is calculated in order to know how much tax to pay:
  • Gain: 206.921,97€
• A 19% tax would have to be paid on the gain. In this case: 315,17€
• As 3% (€18,000) will have already been withheld by the buyer and deposited with the tax office at the time of the transaction,
• The non-resident seller in Spain, still has to pay 21.315,17€ (39.315,17 – 18.18€).

 

 

2. Plusvalia tax in Spain

With regard to the plusvalia tax on the sale of property in Spain, the Tax on the Increase in Value of Urban Land (IIVTNU) is a tax on the increase in value of the land being sold as a result of the transfer of the property in Spain. Its payment corresponds to the seller, and the buyer is subsidiarily responsible for the payment in case of non-resident sellers in Spain.

If you are considering the sale of your property in Spain, we invite you to contact our offices. We will be pleased to provide you with detailed information on all costs and taxes related to the sale of your property. At Welex, we are committed to providing you with expert and personalized advice to ensure a smooth and seamless process. Please do not hesitate to contact us; we will be happy to assist you.