In 2007 Declan O'Brien bought a flat in Mijas for 240,000 €, and paid another 18,000 € in purchase tax, notary and land registry fees. He lives in Cork. Between 2019 and 2022 he let it to a family, and the rest of the time he used it in the summer. In April 2026 he sold it for 205,000 €. The buyer withheld 6,150 € at the notary's office. His first reaction was to think that, having lost money, he had nothing to declare in Spain. It is an expensive mistake: without a return, those 6,150 € stay with Hacienda, as the Spanish tax office is commonly called.
The obligation exists even when the result is negative
Article 28.3 of the IRNR Law (the law on Spanish non-resident income tax) exempts taxpayers from declaring income on which tax has already been withheld, but that exemption does not extend to sales of property. Article 14.4 of the Regulations says that the non-resident "must declare, and pay where applicable, the final tax, offsetting the amount withheld against the tax due". And the order governing Modelo 210, the non-resident's tax return, specifies that returns on transfers of property are filed within three months after the buyer's month "regardless of the result".
In other words: with a gain, with a loss or with a zero result, the sale is declared. What changes is the outcome. With a loss, the tax is zero and everything withheld becomes a refund.
Calculating the loss, depreciation included
Declan is tempted simply to subtract 205,000 from 258,000. It is not that simple, because for four years the flat was let, and article 40 of the IRPF Regulations (the rules on Spanish personal income tax) requires the acquisition value to be reduced by the minimum depreciation for those years, whether or not he deducted it. The depreciation base is the building, without the land. With 60 % for the building according to the IBI bill (the annual municipal property tax):
- Initial acquisition value: 240,000 + 18,000 = 258,000 €.
- Depreciation base: 60 % of 258,000 = 154,800 €.
- Annual depreciation at 3 % (article 14.2.a of the IRPF Regulations): 4,644 €.
- Four years let: 18,576 €.
- Reduced acquisition value: 258,000 − 18,576 = 239,424 €.
- Transfer value: 205,000 − 6,150 of estate agent's commission = 198,850 €.
- Result: 198,850 − 239,424 = −40,574 €.
Depreciation shrinks the loss by more than 18,000 €, but it is still a loss. The tax is zero and the refund is the whole 3 %: 6,150 €. The detail of that adjustment is in I let the flat: does that count against me when I sell?.
What happens if he does not declare it
| Situation | Consequence |
|---|---|
| Declan files on time | Zero tax and a refund claim for 6,150 € |
| He files late, but within the limitation period | He can still recover the money; there is no surcharge because there is nothing to pay |
| He never files | The 6,150 € stay paid in and the right to claim them becomes time-barred |
| He files with a sale value far below market value | The authorities may replace it with the market value and reduce or cancel the loss |
A Modelo 210 filed late without financial harm to Hacienda can give rise to the minor offence in article 198 of the Ley General Tributaria, Spain's General Tax Law, with a fixed fine of 200 € that the article itself halves if the return is filed without a prior request. It is not always imposed, but it exists, and it is worth knowing when deciding whether to leave it for later.
The loss cannot be carried anywhere else
Here lies the most unpleasant difference compared with a resident. A taxpayer under IRPF can offset a capital loss against gains of the same year or of the following four. A non-resident without a permanent establishment cannot. Article 15.1 of the IRNR Law provides that these taxpayers are taxed "separately for each total or partial accrual of taxable income, with no offsetting whatsoever between them".
For Declan, this means that those 40,574 € of loss die in this return. They do not reduce the tax on any other sale he makes in Spain, nor on the rental income he has declared. All they achieve is that the tax on this sale is zero.
What effect that loss has in Ireland is another matter, which depends on Irish law and must be confirmed by his adviser there. We do not give opinions on foreign law.
A Modelo 210 claiming back the whole 3 % is, by definition, the one the authorities are most interested in reviewing. If the sale price is low for the area, especially if the buyer is a relative, you should have the justification for the price ready: a valuation, advertisements, offers received. Article 35.2 of the IRPF Law requires the normal market value to be used when the agreed price is lower. We cannot guarantee that the declared loss will be accepted as it stands.
How it is reported on Modelo 210
There is nothing special about the form of a return declaring a loss. The seller is identified by their NIE (the foreigner's tax identification number), the accrual date is entered, which is the date of the deed, and the transfer value and the acquisition value are broken down with their costs. The program calculates the result; when it is negative, the base is zero and so is the tax. The withholding from Modelo 211 is subtracted from that tax and the result is a refund.
What does demand attention is the paperwork. For a sale at a loss you should have:
- The deed of purchase, with the 2007 price and proof of the purchase tax.
- The notary and land registry invoices for that purchase.
- The 2026 deed of sale and the estate agent's invoice.
- The IBI bill that gives the split between land and building, to calculate the depreciation.
- The copy of Modelo 211 the buyer gave him.
If any of the purchase papers are missing, they can sometimes be requested from the notary or the land registry. Something similar happens with invoices for improvements made years ago; what does and does not add to the purchase value is explained in which costs can I add to the purchase value.
You can send us the deeds and the receipts through the property sale form and we will check whether the result really is negative before filing.
The plusvalía municipal does not follow the same arithmetic
The fact that Declan lost money on the property does not automatically mean he pays no plusvalía municipal, the municipal tax on the increase in land value. That tax compares land values, not the total price, and has its own procedure for proving that there was no increase. Article 104.5 of the consolidated text of the Ley de Haciendas Locales (the Local Finance Law) allows this to be shown by providing the deeds of purchase and sale, but the proof has to be made. Moreover, when the seller is a non-resident individual, the one who deals with the town hall is the buyer, acting as a substitute. This is developed in the municipal capital gains tax when the seller does not live here and in the guide on when no plusvalía is paid.
Deadlines not to miss
Declan's deed is dated 14 April 2026. The buyer has until 14 May to pay in Modelo 211, and Declan until 14 August to file Modelo 210. After that, the authorities have six months to refund without paying interest. What happens if those months pass is covered in when do I get back the excess 3 %.
If the flat has several owners, each declares their share of the loss and claims their share of the 3 %; the split is explained in we are two owners.
A sale at a loss is one of the situations we handle within the Salama Tax service for non-residents selling a property, together with the gain, the refund and the plusvalía municipal.