The 3% Retention Tax for Non-Resident Sellers: A Complete Guide
If you sell a property in Spain as a non-tax resident, you will encounter a key concept: the 3% retention (retención). This is not a final tax, but an advance payment on your capital gains tax that the buyer is legally obligated to make on your behalf.
Key Points About the 3% Retention:
- What is it exactly? It is an advance payment of the Non-Resident Income Tax (IRNR) that you owe on the profit made from the sale.
- Why does it exist? It is a measure by the Spanish Tax Agency to ensure that non-resident sellers declare the sale and pay the corresponding tax.
- Who is responsible? The obligation to withhold and pay this 3% lies with the buyer. They must file Form 211 with the Tax Agency within one month of the signing.
- How is it calculated? Simply: 3% of the total sale price stated in the public title deed.
The Key Question: Can I get this money back?
Yes, in full or in part. Once the buyer has paid the retention, you have 4 months to file your capital gains tax return (Form 210). Two outcomes are possible:
- If the tax due on your gain is less than the 3% withheld (or if you sold at a loss), the Tax Agency will refund you the difference or the full amount.
- If the tax is more, you will have to pay the remaining amount.
Need Help with the 3% Retention and Tax Refund?
Managing the retention and the subsequent refund claim can be a complex process. Our tax team specializes in non-resident sellers to ensure everything is done correctly and you get your money back as soon as possible.