Tomás Aguirre, a doctor in Pamplona, signed a private contract in November 2025 to buy a villa under construction in Finestrat. The seller is Kristian Lund, a Norwegian who bought the plot, hired a builder and, halfway through the works, decided not to move to Spain. The price is 480,000 €, in three payments: 48,000 € on signing the contract, 96,000 € when the roof is finished, in April 2026, and 336,000 € at the deed, planned for March 2027, once the first occupation licence has been granted. Tomás has already paid the first two instalments without withholding anything, and now he is suddenly unsure whether he should have.
Payments on account are not the transfer
Article 25.2 of the Law on IRNR (Spanish non-resident income tax) imposes the withholding on "transfers of real estate". The obligation to withhold arises, under article 12.1 of the Regulations, when the tax accrues, and article 27.1.b of the law places the accrual of capital gains "when the change in assets takes place". The one-month period for Modelo 211 also runs "from the date of the transfer" (article 14.3 of the Regulations).
Everything points to the same moment: when ownership passes to the buyer. Under Spanish law, a sale requires, in addition to the contract, delivery: article 609 of the Civil Code says that ownership is transferred through certain contracts "by means of delivery", and article 1462 adds that, when the sale is made by public deed, executing the deed is equivalent to delivery unless the deed shows otherwise.
While Tomás is paying instalments on a house that is not yet finished and has not been handed over to him, he is making payments on account of the price, not acquiring ownership. That is why, in the usual arrangement, he does not withhold on those payments.
Tomás's timetable
| Milestone | Date | Payment | Withholding at that moment? |
|---|---|---|---|
| Private contract | November 2025 | 48,000 € | No |
| Roof completed | April 2026 | 96,000 € | No |
| Deed and handover of keys | March 2027 (planned) | 336,000 € | Yes, on the total price |
How much is withheld and from which payment it comes
The base is the agreed consideration, which is the full price of the villa, not what remains to be paid:
- Total price: 480,000 €.
- Withholding: 480,000 × 3 % = 14,400 €.
- Already paid: 48,000 + 96,000 = 144,000 €.
- Payment at the deed before withholding: 336,000 €.
- Actual payment to Kristian at the deed: 336,000 − 14,400 = 321,600 €.
- Paid in with Modelo 211 in the month following the deed: 14,400 €.
As the last payment is large, there is no cash problem. The risk arises when the contract concentrates almost the whole price in the payments on account and leaves little for the deed. If the last payment were not enough to cover 3 % of the total, Tomás would have to advance the difference. It is worth providing for this in the contract: that the last payment is never less than the withholding, or that the seller undertakes to provide whatever is missing.
When the month starts to run
If the deed is signed on 15 March 2027, Modelo 211 must, in principle, be filed and paid by 15 April. But there is an important warning: the moment of the transfer depends on what the documents say.
Some private contracts state that ownership passes to the buyer from signing, or hand over possession before the deed. In those cases, the transfer could be placed earlier, and with it the Modelo 211 deadline. If the period started to run earlier than you thought, the payment would already be late. Before paying any instalment, it is worth having someone read the contract with this question in mind.
In Tomás's case, the contract expressly says that ownership will be transferred with the public deed and that the keys will be handed over at that moment. It is the wording that avoids doubts.
If you are buying off-plan from a non-resident and would like us to review the contract before the next payment, send it through the Modelo 211 form.
If the seller is a foreign developer
When the seller is not a private individual but a foreign company developing several homes, another question comes into play: the permanent establishment. Article 13.1.a of the law expressly includes among permanent establishments building, installation or assembly works lasting more than six months, as well as offices, branches and other workplaces. A foreign developer with works under way for years and a sales office on the coast may be operating in Spain through a permanent establishment, and in that case the withholding in article 25.2 does not apply, because it only reaches those who act without one.
But that has to be proved. The buyer should not assume it: he needs documentation from the developer that allows him to maintain that there was no obligation to withhold. If there is none, the prudent course is to withhold. We develop this in buying from a foreign company.
If what you are sold is the contract and not the house
Another frequent scenario in new-build property: a non-resident bought off-plan from a developer and, before handover, sells his position in the contract to a third party. The new buyer pays the non-resident what he had already paid in, plus a premium, and takes his place in the contract with the developer.
In that case what is transferred is not yet a finished and registered property, but a right deriving from a sale contract. Whether that transaction falls within article 25.2 is a question that is not settled by a general rule and that depends on how the contract is worded and on which rights are assigned. Where there are doubts about the classification, the risk still falls on whoever pays. It is not a case to decide on instinct in the sales office.
Guarantees during construction
Payments on account in new builds also raise a civil risk that has nothing to do with Hacienda, as the Spanish tax office is commonly called: if the works are not finished, how does the buyer recover what he has paid? With professional developers there are legal mechanisms guaranteeing the amounts paid in advance; with a private individual finishing his own house, the protection almost always depends on what has been agreed. Tomás got Kristian to provide a bank guarantee for the amounts paid. It is a matter separate from the withholding, but one not to forget.
What to do on the day of the deed
- Confirm whether the seller is still non-resident. If in these months he has settled in Spain and proves it with a certificate from the Agencia Tributaria, the Spanish tax agency, there will be no withholding, as we explain in how do I know whether the seller is non-resident.
- Calculate the withholding on the total price and subtract it from the last payment.
- File Modelo 211 within the month and give the seller his copy, as set out in what I have to give the seller.
If the month goes by, the solution is in I missed the month. The deadlines that follow, on the seller's side, are summarised in the guide on the deadlines in a non-resident's sale.
The questions anyone buying from a non-resident asks, new builds included, are grouped on the Salama Tax page on the 3 % withholding.