3% Retention Non Resident Sale

3% Retention

The 3% Retention is a payment done by the buyer of a property on behalf of the seller.

Why must 3% of the value of the property retained?

According to the Law ‘Real Decreto Legislativo 5/2004, de 5 de marzo‘, if a Non-Resident citizen sells their property, this percentage must be retained because, presumably, they are going to leave the country, so this amount is withheld to pay any income tax and any other fiscal liabilities which the vendor might be liable for.

When must the 3% transfer be made to Hacienda (Tax Authorities)?

The buyer must submit the 3% to the Tax Authorities within the first month of the transmission of the property. This is done through the Tax Form Application 211 and is usually done by the Notary or the Lawyer of the buyer.

How can the seller recuperate their money?

After one month and once the 211 Tax Form Application has been submitted, the seller can claim the amount retained. This is done through the Tax Form Application 210 and must be done within the next 3 months.

Santa Cruz, Sevilla, Spain
Santa Cruz, Sevilla, Spain

Will Hacienda refund all of the amount retained?

The 3% retained will be refund in total if there is not Capital Gains Tax liable and if your taxes are up to day with Hacienda.

Only a part of the 3% retained will be refund if you have any taxes to arrange with Hacienda (Capital Gains Tax, Rental Income Taxes or Non Resident Tax for example).

Plusvalia does not apply here and must be arranged with the Town Hall when the property is transferred.

How long does it take?

The refund usually takes between 4-12 months (or even more sometimes), it depends of the county (provincia) of where the property is located.

To make sure that you get back your 3% retained, contact a highly qualified Lawyer or accountant with experience in Non-Residents, because if your claim is not done properly, it can take years to see the money in your account.

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