TAXES · 3 % WITHHOLDING
The 3 % the buyer withholds when you sell: what it is and how to recover the surplus
By Moisés Vicens i FrancésJune 27, 20267 min read
When a non-resident sells their home in Spain, the buyer is required to withhold 3 % of the price. Many people believe it is lost tax, and it is not: it is an advance payment, and often a good part of it is recovered. I explain what it is, why it exists and how to claim back what is yours.
When a non-resident sells a house, several parties are involved who "withhold" or ask for money: the buyer, their bank and the agency (gestoría) that handles the transaction. It is easy to get confused and write off money that, in reality, can be recovered. Let us bring some order, starting with the most important piece: the 3 % withholding.
The 3 % withholding: what it is and why it exists
When the seller is a non-resident, the law requires the buyer to withhold 3 % of the sale price and pay it to the tax authorities via Modelo 211. It is not a whim or a charge by the buyer: it is an advance payment of the tax that the non-resident seller will have to settle on the capital gain (the IRNR). It is a guarantee for the tax authorities that this tax will be paid, even though the seller lives abroad.
It is an advance, not the final tax
Here is the key that many people fail to take advantage of. That 3 % is an advance, not the final bill. The gain on the sale is taxed at 19 % for non-residents. If 19 % of your actual gain is less than the 3 % withheld from you, the difference is refunded: it is claimed by filing Modelo 210 after the sale. This is very common — especially when little has been gained or the property is sold at a loss — and yet many people never claim it and leave that money with the tax authorities.
Watch out for the bank's agency
Besides the 3 % tax withholding, other "withholdings" may appear in the transaction that are not taxes: fund provisions requested by the buyer's or the bank's agency (gestoría) to cover costs (notary, registry, their own fees). That is legitimate, but it is not the same as the tax, and it should be justified and reconciled down to the last cent. Do not mix the two: the 3 % goes to the tax authorities; the provisions go to cover costs.
What you need to keep an eye on
- That the buyer actually pays the 3 % with Modelo 211 (ask them for proof).
- That the 3 % is calculated on the correct price, not on an inflated figure.
- That the refund of the surplus is claimed with Modelo 210 if your actual tax is lower.
- That the agency's provisions are itemised and justified, and that anything unspent is returned to you.
If the buyer does not pay the 3 %
There is a risk worth knowing about: if the buyer does not apply the withholding or does not pay it, the property itself becomes liable for that amount. In other words, the problem can follow the house and whoever buys it. That is why keeping a close eye on this piece protects both parties, not just the seller.
If you are going to sell your property on the Costa Blanca as a non-resident, write to me before you sign. I calculate your actual gain, make sure the 3 % withholding is done properly and, if too much has been withheld, I handle the refund with Modelo 210. It is your money; there is no reason to leave it with the tax authorities.
Frequently asked questions
What is the 3 % withholding when selling?
It is the 3 % of the price that the buyer is required to withhold from the non-resident seller and pay to the tax authorities with Modelo 211, as an advance payment of the IRNR the seller owes on the gain from the sale.
Is it a tax or an advance?
An advance. The final tax is 19 % of the gain. If that 19 % is less than the 3 % withheld, the difference is recovered by filing Modelo 210 after the sale.
How do I recover what was withheld in excess?
By filing Modelo 210 after the sale, declaring the actual gain and requesting a refund of the surplus withheld. It is worth doing properly and on time so you do not lose that money.
Can the bank's agency withhold money from me?
It may ask for fund provisions to cover the costs of the transaction, but that is neither a tax nor the 3 % withholding. It must be justified and itemised, with anything unspent returned.
What happens if the buyer does not pay the 3 %?
The property becomes liable for that amount, which is a risk for the buyer. That is why it is worth making sure the withholding is applied and paid correctly.
Legal basis and official sources
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I keep the 3 % withholding on your sale under control and handle the refund of the surplus with Modelo 210.
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