Lucía Ferrer lives in Valencia and has found the flat she was looking for in Dénia: 265,000 €, three bedrooms, views of the Montgó. The seller, Henrik Olsen, holds a Danish passport and an NIE (the identification number Spain gives foreigners), has been on the padrón (the municipal register of inhabitants) in Dénia for six years and assures her over the phone that he "lives here all year round". The estate agency tells Lucía there is no need to withhold anything. Her brother, who recently bought from a British woman, warns her of the opposite. Ten days before completion, Lucía does not know whom to believe, and on that answer depends whether, at the notary's office, she has to keep back 7,950 € of the price.
The question is not about passports or where the house is
The obligation to withhold arises from article 25.2 of the Law on IRNR (Spanish non-resident income tax): when a taxpayer under that tax acting without a permanent establishment transfers a property located in Spain, "the acquirer shall be obliged to withhold and pay in 3 per cent" of the agreed consideration.
What matters, therefore, is whether Henrik is an IRNR taxpayer, and that depends on his tax residence. Article 6 of that law refers to article 9 of the IRPF Law (Spanish personal income tax), which treats as resident anyone who spends more than 183 days in Spain in the calendar year or has the main centre of their activities or economic interests here, with an added presumption when the spouse from whom they are not separated and the minor children who depend on them live in Spain.
Nationality plays no part in that analysis. Someone from Seville who has worked in Luxembourg for a decade may be non-resident; a Dane who lives in Dénia, resident. For Lucía, however, the problem is not theoretical: she cannot count the days Henrik spends in Spain, nor does she know his economic interests. She needs a piece of paper that protects her.
The only document the Regulations accept
Article 14.2.a of the IRNR Regulations says that the buyer will not be obliged to withhold "when the transferor proves that they are subject to Personal Income Tax or Corporation Tax by means of a certificate issued by the competent body of the Tax Administration".
The rule does not speak of statements by the seller or of indications. It requires a certificate from the Spanish tax authorities stating that Henrik is taxed in Spain under IRPF. In practice it is the tax residence certificate issued by the Agencia Tributaria, and we explain how to obtain it in the guide on the tax residence certificate. If Henrik is resident, getting it is a routine formality; if he raises objections to applying for it, that in itself is a signal.
Papers that seem to prove residence and do not
Almost every foreign seller who lives in Spain brings one or more of these documents to the notary's office, convinced that they are enough:
| Document | What it actually proves | Does it release the buyer from withholding? |
|---|---|---|
| Certificate of registration on the padrón | That the person is entered in the municipal register | No |
| NIE | That the person has an identification number as a foreigner | No |
| TIE (the foreigner's identity card) or EU citizen registration certificate | Their administrative status of stay or legal residence | No |
| IRPF returns filed | That they filed a return, not that Hacienda (as the Spanish tax office is commonly called) recognises them as resident | Not on their own |
| Statement in the deed | What the seller himself declares about his address | No |
| Tax residence certificate from the Agencia Tributaria | That they are taxed in Spain under IRPF | Yes, it is the paper provided for in article 14.2.a |
The fourth row deserves a nuance. Spanish income tax returns filed over several years are a serious indication that Henrik is resident, and they help the certificate come out without problems. But the Regulations ask for the certificate, not for indications.
What Lucía stands to lose if she follows her instinct and gets it wrong
Suppose Lucía trusts him, does not withhold and pays the full 265,000 €. A year later the Agencia Tributaria finds that Henrik had been tax resident in Denmark for years.
- Withholding she should have made: 265,000 × 3 % = 7,950 €.
- That amount is a debt of Lucía's as withholder (article 37.2 of the General Taxation Law, the Ley General Tributaria), not Henrik's, even though it counts towards his tax.
- In addition, the flat is charged with payment of the lower of the withholding and Henrik's tax (article 25.2, third paragraph).
- If there is a penalty, its base would be the amount not paid in. Article 191 of the General Taxation Law prevents the offence from being classed as minor when amounts "which should have been withheld" have not been paid in, and classes it as serious, with a fine of 50 to 100 %, when nothing was withheld. At the minimum percentage, 3,975 €.
- If Lucía accepted the proposal and paid on time without appealing, article 188 provides a 30 % reduction for agreement and another of 40 % for prompt payment: 3,975 × 0.70 × 0.60 = 1,669.50 €.
All that in order to recover the 7,950 € afterwards, if she can, by claiming them from Henrik, who has already received the full price and lives in Copenhagen. The actual penalty depends on the file and may be different; what does not change is that the risk is borne by the buyer.
The estate agency or the seller saying there is no need to withhold does not shift the obligation. Article 25.2 places it on the acquirer, and the General Taxation Law treats the acquirer as withholder. If the Agencia Tributaria certificate is missing on the day of signing, the prudent course is to withhold.
When to ask for it and what to check in it
The conversation about the certificate should take place when the arras contract (the deposit agreement signed before the deed) is signed, not at the notary's office. Three checks avoid surprises:
- That it is issued by the Spanish Agencia Tributaria and not by a foreign tax authority. A Danish residence certificate helps Henrik apply the treaty in his own Modelo 210, but it proves exactly the opposite of what Lucía needs.
- That the name and NIE match those in the deed, and that it refers to IRPF.
- That its date is close to completion. Residence can change from one year to the next, and an old certificate says nothing about the year of the sale.
If the certificate does not arrive in time, the reasonable way out is to withhold and let Henrik recover whatever is due. Incidentally, if Henrik really is resident, 3 % paid in through the non-resident channel would complicate his life: that is why getting the paper before signing suits him as much as it suits Lucía. The guide on how to check the seller's residence has a fuller list of what is worth asking for.
If you would like us to review the seller's documents before completion, you can send them to us through the Modelo 211 form.
Sellers who have just arrived or are leaving
The doubtful cases cluster at two moments. A seller who settled in Spain a few months ago may not yet be able to obtain a residence certificate for the current year, because he has not reached 183 days and has never filed a return here. And one who is selling precisely because he is leaving may be resident on the day of signing and stop being so afterwards, or may already have stopped being so even though he is still on the padrón.
In both cases the practical rule is the same: no certificate, withholding. The guide on who is non-resident for the purposes of Modelo 211 develops these borderline cases.
If the seller is a company
When an entity sells, the test is not the padrón but article 8.1 of the Corporation Tax Law: an entity is resident if it was incorporated under Spanish law or has its registered office or its place of effective management here. A Spanish SL (private limited company) with foreign shareholders is resident; a company incorporated abroad, in principle, is not. The certificate that releases the buyer from withholding will then be the one proving that it is subject to Corporation Tax. We cover this in detail in buying from a foreign company.
And if there are several sellers in different situations, each one is examined separately, as we explain in two sellers and only one lives here.
The other questions of anyone buying from a non-resident, from the calculation to the one-month deadline, are gathered on the Salama Tax page on Modelo 211.