If you are a non-resident property owner in Spain and plan to sell your property, it’s important to understand the 3% retention tax. This is a mandatory tax that ensures the Spanish tax authorities collect any Capital Gains Tax (CGT) liability from non-residents at the time of sale.
At Platinum Legal Spain, we specialise in helping non-resident property sellers navigate the 3% retention process, including applying for a refund if no tax is owed.
What is the 3% Retention Tax in Spain?
The 3% retention tax is a withholding tax applied when a non-resident sells a property in Spain. It is designed to secure Capital Gains Tax (CGT) obligations and is paid directly to the Spanish tax office by the buyer.
- Who Pays? The buyer is legally required to withhold 3% of the purchase price and deposit it with the tax authorities.
- Why Is It Withheld? To cover any potential Capital Gains Tax (CGT) and other outstanding taxes owed by the seller.
- What If I Owe No Tax? If no CGT is due, the seller can claim a refund of the retained amount.
📌 Example Calculation
- Property Sale Price: €250,000
- 3% Retention: €7,500 (paid by the buyer to the tax authorities)
The seller can later claim this amount back after the sale, if no CGT or other taxes are due.
How Does the 3% Retention Work?
- Step 1: Buyer Withholds 3%
At the time of sale, the buyer retains 3% of the agreed sale price.
- Step 2: Buyer Pays the Retention to the Tax Office
The buyer must file Modelo 211 and deposit the withheld amount to the Spanish tax office within 1 month of the sale.
- Step 3: Seller Can Apply for a Refund
If the actual CGT liability is lower than the 3% retention and other taxes are up to date, the seller can claim back the difference by submitting Modelo 210 within four months of the sale.
- Step 4: Refund Processing
The Spanish tax office will review the claim and process the refund within 6-12 months (in some cases, it can take longer).
Can I Get a Refund on the 3% Retention?
Yes! If the actual Capital Gains Tax (CGT) due is lower than the retained amount, you can apply for a refund of the overpaid tax.
📌 Refund Scenarios:
- Scenario 1: If You Made a Profit, But Owe Less Than 3% in CGT
- Sale Price: €250,000
- 3% Retention Paid: €7,500
- Actual CGT Owed: €5,000
- Refund Due: €2,500
- Scenario 2: If You Sold at a Loss (No CGT Owed)
- Original Purchase Price: €250,000
- Sale Price: €230,000 (Loss of €20,000)
No CGT is Due, so the full €7,500 retention is refunded.
💡 Important: The Spanish tax office may reject refunds if the correct documents are not submitted, or if the seller has any other outstanding tax debts.
How and When to Apply for a Refund?
To apply for a refund, sellers must:
- File Modelo 210 within four months of the sale.
- Provide proof of acquisition cost (original purchase deed, tax receipts, notary fees, etc.).
- Attach sale documents (notary deed, sale contract, proof of payments).
⏳ Refund Processing Time: 6-12 months, but delays can occur depending on the Spanish tax office’s backlog.
📌 Tip: If you are unsure about filing for a refund, Platinum Legal Spain can handle the entire process on your behalf.
What Happens If the Buyer Does Not Pay the 3% to the Tax Authorities?
- The buyer is legally responsible for withholding and paying the 3% retention.
- If the buyer fails to deposit this amount, the Spanish tax authorities may hold the seller accountable for the unpaid tax.
- The seller should always request proof that the 3% has been paid (copy of Modelo 211).
💡 If you suspect the buyer has not made the payment, contact Platinum Legal Spain or your Lawyer in Spain immediately to investigate and resolve the issue.
What Happens If I Owe More Tax Than the 3% Retention?
✔ If your actual Capital Gains Tax (CGT) liability is higher than the 3% retention, you must pay the remaining balance to the tax authorities by filing Modelo 210.
✔ The deadline for filing is four months from the date of sale.
📌 Example:
•Sale Price: €300,000
• 3% Retention Paid: €9,000
• Actual CGT Due: €12,000
• Additional Tax Payment Required: €3,000
How Platinum Legal Spain Can Help with the 3% Retention Tax in Spain
Navigating the 3% retention tax and Capital Gains Tax (CGT) in Spain can be complex, especially for non-residents. At Platinum Legal Spain, we specialize in tax compliance and refund recovery, ensuring you meet all legal requirements while maximising your tax return.
- Filing Modelo 210 for Refund Claims – We handle the entire refund process, ensuring all necessary documents are submitted correctly to the tax authorities.
- Verifying Buyer’s Payment of Modelo 211 – We check that the buyer has correctly deposited the 3% retention, avoiding legal issues with unpaid taxes.
- Recovering Overpaid Tax – If you sold at a loss or owe less tax than the withheld amount, we apply for a full or partial refund on your behalf.
- Avoiding Delays & Complications – Our team ensures your refund request is processed correctly, minimizing the risk of rejection or delays.
- Managing Additional CGT Liabilities – If your CGT is higher than the 3% retention, we assist in filing additional tax payments correctly and on time.
- Legal Representation & Appeals – In case of tax disputes, delays, or incorrect tax assessments, we provide legal representation and appeal support.
- Multilingual Support for Expats – We assist clients in English, Spanish, French, Dutch, Swedish, and German, ensuring clear communication at every step.
📩 Selling property in Spain as a non-resident? Need to claim your 3% retention refund? Contact Platinum Legal Spain today for expert tax assistance!
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Frequently Asked Questions About 3% Retention Tax in Spain
Can I avoid the 3% retention tax?
❌ No. It is legally required for all non-resident property sales in Spain.
What if I forgot to claim my refund?
You have four years to submit a refund claim, but it’s best to file immediately to avoid complications.
How long does the refund take?
⏳ 6-12 months, but some cases take longer if the tax office is backlogged.
What happens if I sell at a loss?
You can claim back the full 3% retention, as no CGT is owed. Any other outstanding taxes may be witheld from this amount before the refund.
Can Platinum Legal Spain handle my refund application?
Yes! We manage the entire process, ensuring all paperwork is correct and submitted on time.
✔ Yes! We manage the entire process, ensuring all paperwork is correct to maximize your refund.
Navigating Spanish tax laws as a non-resident can be complex, but with Platinum Legal Spain, you’ll receive expert tax advice and seamless tax filing services tailored to your needs.
- Full-Service Tax Assistance – We handle CGT calculations, Modelo 210 filings, and refund claims.
- Expert Assistance – We ensure you get back any overpaid 3% retention.
- Avoid Legal Issues – We verify Modelo 211 payments to prevent tax complications.
Multilingual Support – We assist clients in English, Spanish, French, Dutch, Swedish, and German.
📩 Need help with your 3% retention tax refund or CGT payment? Contact Platinum Legal Spain today for a consultation with our tax experts!