Three deadlines, in order
| What | Who | Deadline |
|---|---|---|
| Form 211: paying over the 3 % withheld | The buyer | One month from the transfer |
| Form 210: the capital gain | You, the seller | Three months from the end of the buyer's month |
| Municipal land tax | The buyer, as substitute | Thirty working days, depending on the town hall |
In practice that is four months from the deed for your own return. It is not a comfortable period: you need the purchase deed, the sale deed, the costs of both and the invoices for any works, and those are usually spread across two countries and several years.
It is a payment on account that the buyer pays over in your name, through form 211. If your real gain produces a smaller liability, the difference is refunded; if it produces a larger one, you pay the difference. A great many people believe the 3 % settles everything and file nothing, and what is left behind is a debt with interest.
How the real gain is worked out
The gain is transfer value less acquisition value. What changes the result is the detail on each side:
| Added to the acquisition value | Deducted from the transfer value |
|---|---|
| The price you paid at the time | The sale price |
| Transfer tax or VAT on that purchase | The estate agent's commission |
| Notary, registry and conveyancing costs | Notary and conveyancing costs on the sale |
| Investments and improvements, with invoices | The municipal land tax, if you pay it |
| Less the depreciation deducted if you let it | The energy performance certificate |
Two warnings that cost real money. Depreciation reduces your base. If the property was let and you deducted the annual 3 % depreciation, that amount comes off the acquisition value — and it comes off even if you never deducted it, because the law computes a minimum depreciation. And a repair is not an improvement: replacing a boiler with an equivalent one is an expense; turning a storeroom into a bedroom is an improvement. Only improvements are added, and only with invoices.
Improvement or repair: the line that decides the figure
Of everything added to the acquisition value, this is the item that moves the most money and provokes the most argument on review. The statute says it in one line — article 35.1.b) of the Spanish income tax act requires the cost of investments and improvements to be computed — and in the next line it leaves out conservation and repair costs. So the question is where the boundary falls.
Tax law does not define improvement. The definition comes from accounting: the resolution of the Spanish accounting and audit institute of 1 March 2013, to which the tax administration's own income tax manual refers, treats as an improvement the set of activities that alter an asset so as to increase its previous productive efficiency. Article 13 of the income tax regulations, in turn, describes conservation and repair costs as those incurred regularly to keep the asset in normal use.
From those two sources comes the criterion the administration applies, repeated in binding rulings of the Directorate-General for Taxation — among others V0427-19, V0079-22, V2605-23 and V0537-24:
| Conservation and repair | Extension or improvement | |
|---|---|---|
| What it does | Returns the asset to its former state and keeps it in normal use | Increases capacity or habitability, or extends useful life |
| Effect on a sale | Does not add to the acquisition value | Adds to the acquisition value |
| Effect if you let it | Deductible against rental income, capped at the income | Not an expense: it is depreciated |
| Examples usually accepted | Painting, replacing a boiler with an equivalent one, repairing wiring, changing taps, curing damp, replacing worn flooring with similar flooring | Enclosing a terrace, installing a lift where there was none, adding a bathroom or a bedroom, fitting air conditioning where none existed, installing solar panels, a full rehabilitation |
The point is not that the component is new: it is whether the resulting installation is better than the one before. Swapping old windows for equivalent ones is a repair. Swapping single glazing for thermally broken units, improving the insulation, has an argument for being an improvement. And a full refurbishment almost always contains both: the right approach is to break it down, not to put the whole invoice in one bucket.
What has to be kept
- A complete invoice, not a quotation and not a receipt: with the issuer's tax number, a breakdown of the work and the VAT. Without an invoice the item does not count, however obvious the works are.
- Proof of payment by traceable means. Cash payment between a business and a private individual is limited by law and, in any event, leaves the payer with no evidence.
- The building permit or the notice given to the town hall, where there was one: it is the document that best shows the works altered the property rather than merely maintaining it.
- Before and after photographs, if you have them. Not formal evidence, but on a review they explain in a second what a quotation does not say.
Spending twenty thousand euros on works, keeping no invoices, and adding the works to the purchase price years later. On review that item falls away entirely and the gain rises by exactly that amount, with interest. The paperwork for a refurbishment is kept from the day it is done, not from the day the property is sold.
Your case, in two minutes
What applies to your property sale, in two minutes
The form for this service asks only what matters here. At the end you have your map of obligations, the deadlines running against you and a fixed price.
What surfaces on a sale that nobody expected
A sale is the moment the administration cross-checks everything about that property. So before the gain is filed, we look at:
- Undeclared imputed income for the years the flat stood empty. Years fall out of time after four, but the open ones surface.
- Undeclared rent, where there was any.
- Wealth tax, if the value exceeded the threshold that applied to you. See form 714.
- The municipal land tax, and whether the real basis beats the objective one. That comparison is explained on its own page.
Filing the gain without having looked at those is asking for a query. And if something is missing, there is still time to put it right on your own initiative with a surcharge instead of a penalty, as we set out on filing late.
What your property sale costs
| Work | Price |
|---|---|
| Form 210 on the gain, one seller and one property | 405 € |
| Each additional seller of the same property | 140 € |
| Reviewing the earlier years before filing | included |
| Municipal land tax, calculation and filing | 175 € per property |
| Chasing the refund if it is delayed | from 290 € |
Taxes included. Send us the two deeds and within two days we will tell you what the position is and what can be recovered.
Questions we are asked about your property sale
When is the excess over the 3 % refunded? The administration has six months from the end of the filing period to refund, and after that it pays interest. In practice it often takes longer, and it is common for them to ask for documentation before paying.
What if the buyer never paid the 3 % over? Then the property stands as security for the debt and the administration can pursue it. Check the form 211 receipt before leaving the notary's office.
I sold at a loss. Do I still file? Yes. Form 210 has to be filed even where the result is nil or negative, because that is the route to recovering the 3 % withheld. No return, no refund.
Can I claim main-home rollover relief? Residents of the European Union, Iceland, Norway and Liechtenstein can, if the property was their main home in Spain and they reinvest in another main home within the deadlines. It has to be evidenced, and that is prepared in advance: see the reinvestment exemption.
There are two of us on the deed. One return or two? One each, each for their share of ownership. The 3 % withheld is split in the same proportion.