Capital gains tax when selling property in Spain as a non-resident: how IRNR works and what you'll pay

What is the IRNR and why does it apply to you?

If you own a property on the Costa Blanca but don't live in Spain for tax purposes, selling that property means you'll almost certainly make a profit. That profit doesn't go untaxed. The Impuesto sobre la Renta de No Residentes (IRNR) — Spain's non-resident income tax — applies to capital gains made by people who sell Spanish property while living abroad.

The tax rate is currently 19% for residents of European Union and European Economic Area countries. If you're a UK national, the picture is slightly less clear since Brexit. Technically the UK is now a third country, which would imply a 24% rate — but Spanish courts have consistently ruled that UK nationals should be taxed at 19%. The Agencia Tributaria's position has not been fully settled, so if you hold a British passport, get advice from a Spanish specialist before you sign.

How is the capital gain calculated?

The taxable gain isn't simply what you sell for minus what you paid. Both figures have adjustments that can bring the amount down considerably — if you have the documents to prove them.

The basic formula is:

Gain = Transfer value - Acquisition value

The transfer value is your sale price minus the direct costs of selling: mainly estate agency fees and any other costs directly tied to completing the sale.

The acquisition value is what you originally paid plus all the costs of buying at the time: the purchase tax (ITP, or VAT plus stamp duty on a new build), notary fees, land registry fees, and legal or agency fees you paid when you bought. You can also add the cost of any improvements made to the property, as long as you have official invoices for them.

What can you deduct to reduce your gain?

Many sellers don't realise that their original purchase costs increase the acquisition value and therefore reduce the taxable gain. These are the main items to gather:

• Transfer tax (ITP) or VAT and stamp duty paid at purchase
• Notary fees from the purchase deed
• Land registry inscription fees
• Solicitor or gestor fees paid at the time of purchase
• Structural renovations or improvements, with official invoices
• Estate agency commission on the current sale

Dig out those old receipts. The invoice for the kitchen you renovated in 2016 could save you a few thousand euros at tax time.

A real example with actual numbers

Here's a worked example to make this concrete. You bought an apartment in Orihuela Costa in 2012 for €150,000. At the time, you paid around €15,000 in purchase costs (ITP, notary, registry). Your total acquisition value is therefore €165,000.

You now sell for €220,000. The agency charges 4%: €8,800. Your net transfer value is €211,200.

The capital gain is:

€211,200 - €165,000 = €46,200

Tax at 19%:

€46,200 × 19% = €8,778

The 3% retention and how it connects to IRNR

When a non-resident sells in Spain, the buyer is legally required to withhold 3% of the sale price and pay it directly to the Spanish tax authority within one month of signing. This isn't the final tax: it's an advance payment on account.

In the example above: 3% of €220,000 is €6,600 withheld at signing. If your actual IRNR is €8,778, you owe an additional €2,178 via Modelo 210.

If your final IRNR liability is lower than €6,600 — because you have significant deductible expenses — you're entitled to a refund of the difference. And if you sell at a loss (transfer value lower than acquisition value), there's no IRNR to pay at all, and you can claim back the full €6,600 withheld.

When to file and how it works

The IRNR on the capital gain is declared using Modelo 210, submitted to the Agencia Tributaria within 4 months of the sale date. A Spanish gestor or solicitor can handle this on your behalf with a power of attorney — you don't need to be physically present in Spain.

What if you sell at a loss?

If your transfer value is lower than your acquisition value, the gain is negative. No IRNR is due. You still need to file Modelo 210 to document the loss and request a full refund of the 3% withheld by the buyer. Without filing, the tax authority keeps the money.

Our recommendation

This is not a tax to manage without professional support. The deductible expenses — especially purchase costs from years ago and renovation invoices — can meaningfully reduce what you owe, but only if they're properly documented and included in the filing. An experienced gestor knows what to ask for and how to present it correctly to the Agencia Tributaria.

At Bennecke, we've been working with international buyers and sellers on the Costa Blanca since 1988. We can connect you with trusted gestores in Torrevieja who specialise in non-resident tax matters. Get in touch before you sign, so you can plan ahead.