What is the Spanish 3% Retention Tax?

If you are selling your Spanish property, you may have heard about the 3% retention fee. The most important thing to remember is that you can get it back with our help. In this article, we are going to explain the fee in more detail – let’s dive right in!

What is the Spanish 3% Retention Tax

What is the 3% retention fee in Spain?

The 3% retention fee is a form of capital gains tax in Spain, it is applicable to non-residents when they sell a Spanish property.

Capital gains taxes in Spain are based on the difference between the original purchase price of your property and the price you are going to sell your property for. However, expenses, taxes and other costs can be deducted from both of these figures.

So, how does the 3% retention fee work?

The buyer retains 3% of the purchase price of the property and then presents this sum to the tax office. The vendor of the property can then reclaim this figure. 

If the vendor can prove that all their taxes are paid up to date, they will be returned all or part of the 3% fee. However, if there is a balance to be paid to the Spanish tax authorities, the tax due will be deducted from the 3% retention amount. It is uncommon for the full 3% to be returned, however, our team will ensure you receive what you are owed.

The Notary ensures that the purchase price of the property is split so the 3% goes to the applicable tax authority.  

Why is this fee retained when I sell my Spanish property?

The purpose of retaining this amount is so any outstanding taxes or fees that the vendor is liable to pay are submitted to the Spanish tax authority correctly.

For example, if an individual was to sell a Spanish property and then move the money to another country, they may never come to Spain again. Therefore, it might be tempting for them to leave Spain without paying their taxes. In this situation, it would be very hard for the Spanish Tax Authority to recover it. So, the 3% retention fee was introduced to stop this happening.

Is the 3% fee returned automatically in Spain?

The 3% fee is not returned automatically, the vendor must request for it to be refunded by filing out the relevant tax forms. These forms need to be sent to the local Spanish tax authority. HomeFinance Spain can complete the entire process of getting your 3% fee returned. 

When the Spanish tax authority is calculating your refund, they will review the entire tax history of your property. Therefore, if you have not submitted your Spanish tax return, you could experience delays in getting your 3% retention fee back. Property owners must submit a Spanish tax return within 4 months of the completion of their property for the refund to be granted. We can also help you with your non-resident tax return! 

How can I get my 3% retention fee back?

Our team of expert advisors can help you get this fee back. The process can be very long as a lot of documents are required – but with our service you are safe in the knowledge that we are looking after it for you!

Does the 3% have to be retained if I am a resident in Spain?

No, the buyer will not retain the 3% if the seller is a resident in Spain. If you would like to avoid having this fee retained when you sell your property, we can help you apply for residency in Spain.

Over to you...

So, now we have explained what the 3% retention fee is and how we can help you get it back – we hope you don’t forget this important step when selling your Spanish property.

For more information on related services – see Conveyancing in Spain and Non-Resident Tax Return.

HomeFinance Spain can get your 3% retention fee back!

Want to discuss the 3% retention fee with one of our conveyancing specialists? Our experts are here to help you. 

Get in touch today by calling (0034) 96 682 11 72 or by filling in the contact form provided.

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