Selling property in Spain, and the money that does not reach you at completion

A seller who is not tax resident in Spain does not receive the sale price at completion. A percentage is withheld at the notary and paid to the tax office before the balance reaches them, and a municipal tax falls due shortly afterwards. Neither is a surprise if you knew; both are a shock if you did not, and the second one arrives after the money has gone.

This page sets out what a non-resident seller should expect and what should be in order before the property goes to market — because the documents you assemble in advance are the difference between a sale that completes on time and one that stalls at the notary.

The retention at completion

Where the seller is not tax resident in Spain, the buyer is obliged to withhold a percentage of the agreed price and pay it directly to the Agencia Tributaria on account of the seller’s tax liability on the gain. It is not optional and it is not negotiable between the parties — the obligation sits on the buyer, who has their own exposure if they fail to do it.

Two consequences follow.

Your net proceeds at completion are lower than the price. If the sale is funding a purchase elsewhere with a completion date of its own, this is the number to plan around.

If the retention exceeds what you actually owe, the excess is reclaimed, not refunded automatically. It requires a filing, and the refund takes time. A seller who has made a loss on the property, or a small gain, is typically owed money back — and will not receive it unless someone applies for it.

The rate, the form and the deadlines are set nationally by the Agencia Tributaria, which is also where the current figures are published. We do not print them here because they change without anyone telling the seller.

Plusvalía municipal

Impuesto sobre el Incremento de Valor de los Terrenos de Naturaleza Urbana — in practice, plusvalía. It is a municipal tax on the increase in the value of the land, charged by the town hall, and it falls on the seller.

Two things about it are worth knowing.

It is a tax on the land, not on the building, and it is separate from the capital gains tax on the transaction. Sellers who have budgeted for one regularly have not budgeted for the other.

Its calculation was reformed after the Spanish Constitutional Court ruled against the previous method, and the current system offers more than one way of computing the base. Where there has been no real increase in land value, there are circumstances in which no tax is due — but that has to be established, not assumed. The town hall administers it; for a Marbella property that is the Ayuntamiento de Marbella.

Capital gains on the sale

The gain is broadly the difference between the acquisition value and the transfer value, each adjusted for allowable costs and taxes. For non-residents it is declared through the non-resident income tax return.

Which costs are allowable is the part worth attention, because it directly reduces the taxable gain. The transfer tax you paid when you bought, notary and registry fees on the purchase, and certain documented improvement works typically fall into this category. Routine maintenance generally does not.

This is why we tell owners to keep purchase invoices for as long as they own the property. A seller who cannot evidence what they paid in costs is taxed as though they paid none.

Rates and the treatment of specific reliefs are set nationally and vary with the seller’s circumstances and residence — a matter for a tax adviser with your figures, not for a general page.

Where the seller’s paperwork decides the timetable

Most Spanish sales that run late run late for documentary reasons, and almost all of them are foreseeable. Before going to market, have:

• Nota simple — the current Land Registry extract, showing what is registered and what charges sit on the property.
• Title deed — the escritura from your own purchase.
• Licence of first occupation, and the works licence, particularly for a villa or anything that has been altered.
• Energy performance certificate — required to market the property, not merely to complete.
• Certificate of community debt, confirming community fees are paid up to date, if the property is in a community of owners.
• Recent IBI receipts and utility bills.
• Evidence of your non-resident filings, which the buyer’s lawyer may ask for.
• Documentation of improvement works, for the capital gains calculation.

In Marbella specifically, add the question of whether the building matches its licence and its registry description. Because of the municipality’s planning history, a buyer’s lawyer here looks harder at that than they might elsewhere, and an unresolved discrepancy discovered during a sale is far more expensive to address under time pressure than it would have been at leisure.

Pricing from what was paid, not from what was asked

Asking prices on portals record what sellers hoped for. Registered sale prices record what buyers paid, and they are a matter of public record through the Land Registry.

For a Marbella property, comparables from the same urbanisation matter more than a municipality-wide average, because the Golden Mile, Nueva Andalucía, the old town, San Pedro and the eastern beaches do not move together.

An overpriced property does not simply sell later — it sells worse. Time on the market is visible, and the eventual buyer negotiates against it.

If the property was inherited

An inherited Spanish property carries its own history into a sale: how it was valued for inheritance tax, whether that tax was settled, and whether the registry entry was ever updated into the heirs’ names. A sale cannot complete cleanly if the registry still shows the deceased. This is worth checking long before a buyer appears.

Frequently asked questions

What is withheld when a non-resident sells property in Spain?

The buyer is obliged to withhold a percentage of the agreed price and pay it directly to the Agencia Tributaria on account of the seller’s liability on the gain. It is a legal obligation on the buyer rather than something the parties agree. The seller therefore receives less than the sale price at completion.

Can I get the retention back if I owe less than was withheld?

Yes, but it is reclaimed rather than refunded automatically. It requires a filing with the tax office and the refund takes time. Sellers who made a loss or a small gain are frequently owed money and never receive it because no one applied.

What is plusvalía municipal?

A municipal tax on the increase in the value of the land, charged by the town hall and payable by the seller. It is separate from capital gains tax and is calculated on the land rather than the building. After a Constitutional Court ruling the calculation method was reformed and there is now more than one way of computing the base.

Is plusvalía due if I sold at a loss?

There are circumstances in which no tax arises where there has been no real increase in land value, but this has to be established with the town hall rather than assumed. Take it to your lawyer or gestor with the acquisition and sale figures.

How is the capital gain calculated?

Broadly as the difference between acquisition value and transfer value, each adjusted for allowable costs and taxes. Purchase transfer tax, notary and registry fees on the original purchase, and documented improvement works typically reduce the gain; routine maintenance generally does not. Keep the invoices — a seller who cannot evidence costs is taxed as if there were none.

What documents do I need before putting a Spanish property on the market?

A current nota simple, your title deed, the licence of first occupation and works licence, an energy performance certificate, a certificate of community debt if applicable, recent IBI receipts, and documentation of any improvement works. In Marbella, add confirmation that the building matches its licence and registry description.

Do I need an energy performance certificate to sell?

Yes. It is required in order to market the property, not only to complete, and a certificate that has expired needs renewing before the listing goes live.

What if the property was inherited and the registry still names the deceased?

The sale cannot complete cleanly in that state. The inheritance needs to have been formalised, the inheritance tax position settled and the registry entry updated into the heirs’ names. This can take months, so it is worth resolving well before a buyer is found rather than during a transaction.