Selling your Spanish property eventually brings a different tax than the ones you pay while owning it — capital gains tax on the profit, plus a mandatory withholding mechanism specifically designed around non-resident sellers.
The Rate
Non-resident sellers pay capital gains tax at a flat 19% on the profit — the difference between your sale price and your original acquisition cost (purchase price plus qualifying acquisition costs like notary fees, ITP paid, and documented improvement costs).
The 3% Withholding Mechanism
This is the part that surprises many first-time sellers: the buyer is legally required to withhold 3% of the agreed sale price and pay it directly to the Spanish tax authority on the seller’s behalf, as an advance payment against the seller’s capital gains liability. You receive the sale proceeds minus this 3%.
You then file your own capital gains return, calculating your actual tax owed at 19% of the real profit. If the withheld 3% exceeds your actual liability (common when the gain is modest relative to the sale price), you’re entitled to a refund of the difference. If it’s insufficient, you owe the balance.
Worked Example
| Item | Amount |
|---|---|
| Sale price | €350,000 |
| Original purchase cost + fees | €280,000 |
| Taxable gain | €70,000 |
| Capital gains tax owed (19%) | €13,300 |
| 3% withheld by buyer at sale | €10,500 |
| Balance due after filing | €2,800 |
What Reduces Your Taxable Gain
- Documented acquisition costs (notary, registry, ITP paid at purchase)
- Documented capital improvements (not routine maintenance) made during ownership, with invoices
- Selling costs like agent commissions, where applicable under current rules
Keeping thorough records and invoices throughout your ownership period, not just at the point of sale, makes a meaningful difference to your final tax bill.
Frequently Asked Questions
How long do I have to file after the sale?
Generally within four months of the sale date, so this isn’t something to delay — missing the window can add penalties on top of any balance owed.
Does the double taxation treaty with the US or UK reduce this further?
Spain generally retains the right to tax gains on Spanish real estate regardless of treaty provisions, though the treaty affects how your home country credits or treats the tax you’ve already paid in Spain — see our guide on double taxation agreements.
What if I sell at a loss?
No capital gains tax is owed on a loss, and you can typically reclaim the full 3% withheld by the buyer, though you still need to file the return to claim that refund.