Selling as a non-resident

Who this applies to, and the sale at a glance

This guide is for individuals who own a home in Mallorca but are not tax resident in Spain on the day they sell. Under Spanish income tax law you are resident if you spend more than 183 days in Spain in a calendar year, or if your main business or economic interests are here. You are also presumed resident if your spouse and dependent children under 18 live here. Owning a holiday home is not one of the tests. Residents pay Spanish income tax (IRPF) on the gain instead, and they can show the buyer a certificate of Spanish tax residence so that the buyer does not hold back 3%. Residency is covered in moving to Mallorca.

1. 1

   Prepare the paperwork

   Register an energy certificate before you advertise, and gather your deeds, purchase receipts, improvement invoices and the habitability certificate.

2. 2

   Agree the sale

   In the Balearics an estate agent must sign a written mandate (nota de encargo) with you. It must state at least the asking price, the agent’s fee with taxes, how long the mandate lasts and whether it is exclusive (Balearic Law 3/2024). Then sign a private contract with the buyer, usually with a deposit (arras), as described in the buying process.

3. 3

   Ask your bank for a payoff figure

   If the home is mortgaged, ask early. For loans signed since 16 June 2019 the bank must send the figures within three working days.

4. 4

   Sign the deed at the notary

   You sign in person or through a representative with a power of attorney. The buyer pays the price less 3%, and any mortgage is repaid from it.

5. 5

   Buyer pays the 3%

   Within one month of signing, the buyer pays the 3% on modelo 211 and gives you your copy of the form.

6. 6

   Plusvalía is declared

   Within 30 working days, the buyer declares the municipal plusvalía to the town hall in your place.

7. 7

   You file modelo 210

   In the three months after the buyer’s month, you declare the gain and either pay the balance or claim a refund.

8. 8

   Mortgage removed from the register

   A cancellation deed is signed and recorded at the land registry.

9. 9

   The following year

   You declare non-resident income tax on the home for the days in the year of sale when you owned it and it was not let.

Documents to prepare before you sell

Most of these documents are asked for by the buyer’s lawyer and the notary. Some are legal requirements in their own right, and the energy certificate is needed before the home can even be advertised. Start early, because certificates from technicians, the community of owners and the bank all take time.

The 3% retention: modelo 211

When the seller is not resident in Spain and has no business base here (a permanent establishment, in tax terms), the buyer must hold back 3% of the agreed price and pay it to the Agencia Tributaria, the Spanish tax agency. This applies whether the buyer is resident or not, and whether you make a gain or a loss. The 3% is an advance payment towards your own tax on the gain (Non-Residents’ Income Tax Law, art. 25.2). The buyer uses modelo 211, the official retention form. The buyer’s side of this step is covered in buying costs and taxes.

1. 1

   At the notary

   The buyer pays you the price minus 3%. If part of the price goes to your bank to clear a mortgage, the 3% is still worked out on the full agreed price.

2. 2

   Within one month

   The buyer files modelo 211 and pays the 3% to the Agencia Tributaria.

3. 3

   Your copy

   The buyer must give you the copy of modelo 211 marked for the non-resident seller. You need it, or at least its reference number, to credit the 3% on your own return.

4. 4

   Co-owners

   If you own the home with someone who is resident in Spain, the 3% applies only to the share of the price belonging to the non-resident owners.

Retención

The amount the buyer withholds from the price and pays to the tax office for you.

Modelo 211

The form the buyer uses to pay the 3% retention.

Modelo 210

The non-resident income tax return you file to declare the gain.

Capital gains tax: rate and how the gain is worked out

Non-residents pay 19% on a gain from selling Spanish property, whatever country they live in (Non-Residents’ Income Tax Law, art. 25.1.f). There are no bands and no tax-free allowance. Each sale is taxed on its own, so a loss on one property cannot be set against a gain on another or against other Spanish income (art. 15.1). The gain follows the same rules as for Spanish residents: the sale value minus the purchase value. Since 2015, Spain no longer adjusts the purchase price for inflation.

• Bought before 31 December 1994: the part of the gain that built up before 20 January 2006 can be reduced by 11.11% for each year of ownership up to 31 December 1996 beyond the first two (years rounded up). It only applies to sale values up to €400,000 in total across all sales that have used it since 1 January 2015, this one included.
• Bought between 12 May 2012 and 31 December 2012: half the gain on urban property is exempt. This does not apply if you bought from, or are selling to, your spouse, a relative up to the second degree (such as a parent, child, sibling, grandparent or grandchild, in-laws included) or a related company.
• Inherited or received as a gift: the purchase value is the value used for Spanish inheritance or gift tax, capped at market value. See inheritance and wills.
• Sold at a loss: there is no tax to pay, and you can reclaim the whole 3% on modelo 210.

Filing modelo 210 and reclaiming the difference

The 3% retention never settles your tax by itself. You must file modelo 210 for the sale in the three months that follow the buyer’s one-month window, so in practice by four months after signing. This deadline applies whether you owe more or are due a refund (Order EHA/3316/2010, art. 5.a). For example, after a sale on 15 March the buyer has until 15 April to pay the 3%, and your return is due between 16 April and 15 July.

1. 1

   Work out the gain

   Use your deeds, receipts and invoices, as in the table above.

2. 2

   Credit the 3%

   Enter the retention and the modelo 211 reference from your copy, and keep proof of it.

3. 3

   Pay any balance

   You can pay at a Spanish bank, online with a Spanish digital certificate, or by a transfer in euros from a foreign bank account using a payment code the tax office gives you, valid for 30 days.

4. 4

   Or claim a refund

   If the 3% is more than your tax, the difference is paid to an account in your own name, in Spain or abroad. Attach proof that the account is yours.

You can file online with a Spanish digital certificate, or fill in the form on the Agencia Tributaria website and print it to file on paper. An adviser can submit it for you, but for a property sale the return must be made in your own name. Co-owners each file for their own share, except that a married couple who are both non-resident and own the home together can file one joint return. If you claim a relief that depends on where you live, such as the EU reinvestment relief below, you attach a tax residence certificate from your country’s tax authority, valid for one year from issue.

The municipal plusvalía

The plusvalía (impuesto sobre el incremento de valor de los terrenos de naturaleza urbana, IIVTNU) is a town hall tax on the rise in value of urban land between when you acquired it and when you sell. In a sale, the seller is the taxpayer. When the seller is a non-resident individual, the buyer must pay it in the seller’s place (Local Finance Law, art. 106.2) and can then recover it from the seller (General Tax Law, art. 36.3), so the sale contract should say how it is handled. It is declared within 30 working days of the sale. Land classed as rustic for IBI is outside this tax.

After the Constitutional Court struck down the old formula on 26 October 2021, Royal Decree-law 26/2021 of 8 November 2021 created two ways to work out the base. The town hall applies the objective method, but the taxpayer can ask for the real-gain method when it gives a lower figure. Each town hall sets its own rate, up to a maximum of 30%, and its own coefficients within the national maximums.

As an illustration with invented figures: land with a cadastral value of €120,000, owned for 12 complete years, has an objective base of €10,800 at today’s maximum coefficient of 0.09. At the highest possible rate of 30%, the tax would be €3,240. With the coefficient of 0.14 due from 1 December, if the decree-law is validated, the same sale would pay €5,040. Your town hall’s own coefficients and rate may be lower, so ask your lawyer for an estimate before completion. As the buyer files in your place, give the buyer’s lawyer both deeds so the lower method can be claimed.

Paying off and cancelling a mortgage

A buyer will want the home free of your mortgage, so the loan is normally repaid out of the price at the notary. Repaying the loan is only half the job: the mortgage stays on the land registry until a cancellation deed is signed and registered. The bank may charge for handling that paperwork only if you ask it to, and must tell you the cost first.

1. 1

   Ask for the figures

   Tell the bank you will repay early. For loans signed since 16 June 2019 it must give you the information within three working days (Law 5/2019, art. 23).

2. 2

   Repay at completion

   Part of the buyer’s money goes straight to the bank. The bank then issues a zero-balance certificate (certificado de deuda cero), free of charge.

3. 3

   Sign the cancellation deed

   A notary prepares the deed releasing the mortgage. The bank cannot charge you for its representative attending.

4. 4

   File the stamp duty form

   The cancellation deed is declared to the Balearic tax agency (ATIB) for stamp duty (AJD) but is exempt from payment.

5. 5

   Register the cancellation

   The deed goes to the land registry, whose fees depend on the size of the mortgage. Notary and registry fees are charged to you.

For loans signed on or after 16 June 2019, Law 5/2019 (article 23) caps early repayment fees as a share of the amount repaid. On a variable rate the contract can set either 0.15% in the first five years or 0.25% in the first three, and nothing after that. On a fixed rate the cap is 2% in the first ten years and 1.5% after that. No fee can exceed the lender’s actual financial loss. Loans signed before 16 June 2019 follow their contract and the rules in force when they were signed, unless they were changed (novated) or transferred to a new lender after that date, in which case Law 5/2019 applies. The full table is in mortgages for non-residents.

EU and EEA sellers compared with non-EU sellers

The capital gains rate and the 3% retention are the same for everyone. The differences are a relief for EU and EEA residents who sell what used to be their main home, the rate on the income tax for the year of sale, and the possible need for a tax representative. UK residents count as non-EU sellers for all these rules.

Reinvestment relief. If you lived in the Mallorca home as your main home, now live in another EU or EEA country and reinvest the whole sale proceeds in a new main home, the gain is not taxed (Non-Residents’ Income Tax Law, additional provision 7). A main home means one you lived in continuously for at least three years, and it still counts if it was your main home at any point in the two years before the sale. You reinvest within two years after the sale, or towards a new main home bought in the two years before it. Part reinvested means part relieved. If you used a loan to buy the old home, only the sale value minus the loan still outstanding needs to be reinvested.

Your home country may tax the same gain. The UK government explains that for land or a house abroad you may pay tax in both countries, and as a UK resident you claim relief in the UK for the foreign tax (Foreign Tax Credit Relief). Other countries have their own rules and tax treaties with Spain, so ask a tax adviser where you live.

Timing, deadlines and common mistakes

• Treating the 3% as the final tax and not filing modelo 210. If your tax is higher, you owe the difference with surcharges; if it is lower, nobody refunds you unless you file.
• Not filing after a loss. A loss means no tax, but the 3% only comes back if you file modelo 210 and claim it.
• Leaving without your copy of modelo 211. Ask the buyer’s lawyer for it in writing.
• Losing the purchase and building invoices, which can make the taxable gain much larger.
• Forgetting the year-of-sale income tax on the home, which you declare for the days you owned it. The yearly rules are in taxes for owners.
• Not agreeing how the year’s IBI is shared. The town hall charges the whole year to whoever owned the home on 1 January.
• Not telling the community of owners’ secretary about the sale. Until the community knows, you stay jointly liable with the buyer for fees that fall due afterwards (Horizontal Property Law, art. 9.1.i).

Questions buyers ask