Paula Gil, a nurse in Zaragoza, is buying a flat in Salou for 236,000 €. The sellers are a brother and sister who inherited it from their mother in equal shares: Jordi Puig, who lives and works in Reus, and Núria Puig, who moved to Toronto nine years ago. At the first meeting, Jordi takes it for granted that "since he is from here" there is no withholding; Núria asks whether they are going to take 3 % off everything. The notary asks Paula to say what she is going to do before preparing the draft deed.
Each transferor is looked at separately
When a property belongs to several people, in legal terms each of them transfers their share. The withholding in article 25.2 of the Law on IRNR (Spanish non-resident income tax) refers to transfers made by taxpayers under that tax, so it only reaches the share of whoever is one. Article 5 of the same law leaves out, precisely, those who are taxpayers under IRPF (Spanish personal income tax).
In Paula's case, Núria is non-resident and Jordi, in principle, resident. The withholding falls on the half of the price that belongs to Núria.
The figures of the purchase in Salou
| Seller | Tax residence | Share | Part of the price | Withholding |
|---|---|---|---|---|
| Jordi Puig | Spain (proved with a certificate) | 50 % | 118,000 € | 0 € |
| Núria Puig | Canada | 50 % | 118,000 € | 3,540 € |
| Total | 100 % | 236,000 € | 3,540 € |
Step by step:
- Total price: 236,000 €.
- Núria's part according to her 50 % share: 118,000 €.
- Withholding: 118,000 × 3 % = 3,540 €.
- Payment to Jordi: 118,000 €.
- Payment to Núria: 118,000 − 3,540 = 114,460 €.
- Paid to Hacienda, as the Spanish tax office is commonly called, with Modelo 211 in the month following the deed: 3,540 €.
If the price is paid in a single cheque or transfer to a joint account, the deed must make clear which part belongs to each of them and how the withholding has been applied. Otherwise, the internal split between the siblings becomes a source of recrimination.
What Jordi has to provide
The fact that Jordi lives in Reus is not enough. Article 14.2.a of the IRNR Regulations only releases the buyer from withholding when the transferor "proves that he is subject" to IRPF "by means of a certificate issued by the competent body of the Tax Administration". Jordi has to bring his tax residence certificate from the Agencia Tributaria, the Spanish tax agency, to the signing.
If he does not bring it, Paula has two options and neither is comfortable: withhold on Jordi's part as well, or take the risk of not doing so. Withholding from him raises an additional problem, because the IRNR withholding is a payment on account of a tax that Jordi does not pay; recovering it would force him into a procedure that a resident should not have to go through. The sensible thing is for Jordi to get the certificate in time, and how to do so is in the guide on the tax residence certificate. The details of which papers work and which do not are in how do I know whether the seller is non-resident.
It is the buyer who answers for the withholding. If one of the sellers says he is resident but does not provide a certificate from the Agencia Tributaria, the conservative option is to withhold on his share as well. A laborious refund for him is preferable to a debt with a surcharge or penalty for you.
When the shares are not equal
The Puig inheritance is simple: half and half. Other times the split is 70/30, there is a usufructuary (someone with the right to use the property for life or for a period) or the ownership comes from successive purchases. The rule does not change: the withholding is calculated on the part of the consideration that belongs to each non-resident according to what he transfers.
An example with a different structure. If Núria had 25 % and Jordi 75 %, the base would be 236,000 × 25 % = 59,000 € and the withholding 1,770 €.
When there is a usufruct and bare ownership, the consideration of each party depends on the value of their right, which the parties must set in the deed. If the usufructuary is resident and the bare owner is not, or the other way round, the calculation requires the price to be allocated to each right first. It is a case where it is better not to improvise on the day of signing.
If you have a purchase with several sellers and would like us to calculate the bases before the deed, send us the nota simple (the land registry extract) through the Modelo 211 form.
Married couples with different residence
A frequent case on the coast: a married couple, he resident in Spain and she still registered and working in Germany, or a couple who have separated and each live in a different country. The question is the same: what part of the property each spouse transfers. If they appear as owners at 50 % each, the withholding falls on the non-resident's half.
The matrimonial property regime can complicate things. When the marriage is governed by a foreign law, the ownership shown at the land registry does not always reflect how the property is divided between the spouses under that law. We do not give opinions on the law of another country: if there are doubts, the sellers' adviser in their own country must confirm how ownership is attributed, and the base is decided with that information.
How it appears on the form and in the deed
Modelo 211 is filed by the buyer. Order EHA/3316/2010, which approves it, provides in its article 8 for annexes that are completed when there is more than one acquirer or transferor, so that each non-resident seller is identified with their share. What matters is that each one can later support, in their own Modelo 210, the withholding that corresponds to them. A Modelo 211 that does not identify Núria properly leaves her unable to deduct her 3,540 €. The filing procedure is set out in the guide on how to fill in Modelo 211.
It is advisable to include in the deed:
- Each seller's share and their declared tax residence.
- A reference to the Agencia Tributaria certificate provided by the resident seller.
- The amount withheld from the non-resident seller and the undertaking to pay it in with Modelo 211.
- How each person's part is paid.
On the sellers' side, each non-resident files their own Modelo 210 for their part of the gain. We develop that perspective in another question, two of us own the property and are selling.
What happens if you withhold on only one and get it wrong
Suppose Paula withholds from Núria and not from Jordi, and it later turns out that Jordi had been working in Andorra for two years. If Jordi did not provide a certificate, Paula would have a further 3,540 € outstanding, with whatever surcharge or penalty applies, and the part of the flat she bought from Jordi would be charged with that payment, as we explain in what can happen if I do not pay it in. If he did provide it, she will have acted in accordance with article 14.2.a. That is why the certificate is not a courtesy formality: it is the buyer's only protection.
The other questions of anyone buying from non-residents are grouped on the Salama Tax page on the 3 % withholding and Modelo 211.