Investment approach
Selling property as a non-resident: documents and closing sums
A non-resident sells by the usual route, but on completion day 3% of the price is withheld towards their tax and the plusvalía may fall on the buyer. Documents to prepare and the calculation.
The sale of a flat by a non-resident follows the usual route, with three additions. The seller needs an NIE (the foreigner's tax ID). The buyer withholds 3% of the price and pays it to the tax authority on account of the seller's tax (art. 25.2 TRLIRNR, the non-resident income tax law). And the plusvalía municipal (the municipal tax on the rise in land value), where the seller is a non-resident individual, is paid by the buyer as the substitute taxpayer (art. 106.2 TRLRHL, the local taxation law). All of this changes the sum the seller receives on the day of the sale.
A non-resident in this sense is a seller with no tax residence in Spain who sells a property without a permanent establishment in the country.
What changes if the seller is a non-resident
The deal itself at the notary is the same. What changes is the money and the documents around it.
| Question | Resident seller | Non-resident seller |
|---|---|---|
| Withholding from the price | None | 3% of the price, paid in by the buyer on modelo 211 |
| Plusvalía municipal | Paid by the seller | Paid by the buyer as substitute taxpayer |
| Tax on the gain | IRPF (personal income tax) on the progressive scale | IRNR (non-resident income tax) at 19% of the gain (art. 25.1.f TRLIRNR) |
| Return | Annual IRPF | Modelo 210, the 3% withheld is credited |
| Presence | Usually in person | In person or by power of attorney from abroad |
Why 3% and how modelo 211 works is covered in detail in the article on the 3% withholding. The 19% rate and how it differs from the 24% on other income are explained in the article on IRNR on a sale.
Which documents a non-resident seller prepares
The standard file plus what relates to non-residence. It is worth starting several weeks before the notary date.
- NIE. If the seller had one at the time of purchase, the same number is normally used.
- Power of attorney, if the seller will not come. It is made before a notary in the country of residence, an apostille is added or it is legalised, and it is translated. The requirements for the translation and the form are confirmed in advance by the Spanish notary who will handle the deal. What is better done in person is covered in the article on the power of attorney and a personal visit.
- Tax residence certificate from the seller's country, if the seller will rely on a double taxation treaty.
- Certificate from the comunidad de propietarios (owners' association) on debts and approved fees: without it the escritura (notarial deed) is not signed unless the parties expressly waive it (art. 553-5 CCCat, the Civil Code of Catalonia).
- Cédula de habitabilidad (habitability certificate), energy certificate, IBI (annual property tax) receipts, mortgage details if it is not yet repaid.
- A bank account to receive the price, and payment details.
Is a representative in Spain needed
Not always. As the Agencia Tributaria clarifies, residents of the EU and the EEA with an exchange of tax information are not obliged to appoint a representative resident in Spain. Residents of third countries must do so in the cases the tax authority lists, in particular residents of jurisdictions that Spain classes as non-cooperative (jurisdicciones no cooperativas). The representative is appointed before the filing deadline runs out. Whether a particular seller needs one is confirmed by an asesor fiscal (tax adviser).
What the calculation looks like on completion day: a worked example
Worked example, not a forecast. A non-resident individual sells a flat for 500,000 €. The flat has a mortgage balance of 120,000 €, repaid on the day of the sale. The plusvalía is provisionally estimated at 3,500 €; the parties have agreed to withhold it from the price, since the buyer will pay it.
| Line | Amount |
|---|---|
| Price | 500,000 € |
| 3% withheld on account of the seller's IRNR | −15,000 € |
| Withholding for the plusvalía paid by the buyer | −3,500 € |
| Repayment of the seller's mortgage | −120,000 € |
| The seller receives on completion day | 361,500 € |
The seller then files modelo 210 and calculates the real tax: 19% of the gain. If the gain is 150,000 €, the tax is 28,500 €, and on top of the 15,000 € already withheld the seller pays another 13,500 €. If the gain is 50,000 €, the tax is 9,500 € and 5,500 € can be reclaimed. The procedure and deadlines of modelo 210 are described in the article on modelo 210.
Withholding the plusvalía from the price is not written into the law as an obligation: it is an agreement between the parties, drafted by the buyer's abogado (lawyer). But without it the buyer risks paying the seller's tax out of their own money.
When the standard scheme does not work
The scheme changes if the seller is not an individual but a company: then the plusvalía stays with the seller, and the taxes are calculated by company rules. The 3% withholding is not applied when the property is contributed to the capital of a Spanish company (art. 25.2 TRLIRNR). If the flat came by inheritance, inheritance tax is added to the sale, and the heir's rights have to be formalised first. If the seller has a permanent establishment in Spain, the withholding under this rule does not apply. In all these cases the order is confirmed by the asesor fiscal before the arras (the deposit under the preliminary contract) is signed. The general map of taxes for a foreign owner is gathered on the page on taxes for the foreign investor.
Questions and answers
Can a flat in Spain be sold without travelling?
Yes, by a power of attorney made abroad, with an apostille or legalisation and a translation. The requirements for the document are confirmed in advance by the Spanish notary.
What happens if the buyer does not withhold the 3%?
The withholding must be made by the buyer under art. 25.2 TRLIRNR, and responsibility lies with the buyer. The seller in any case files modelo 210 and pays the final tax.
Who pays the plusvalía if the seller is a non-resident?
If the seller is a non-resident individual, the buyer pays it as substitute taxpayer under art. 106 TRLRHL. That is why the parties usually agree to withhold the sum from the price.
What rate of tax on the gain applies to a non-resident?
19% of the gain on the sale of property, the same for residents of the EU and of other countries. The 3% withheld by the buyer is credited against this tax.
Does a non-resident need a representative in Spain to sell?
Residents of the EU and the EEA with an exchange of tax information do not. Residents of third countries must appoint one in the cases the Agencia Tributaria lists.
