In Spain, it is normal for non-Spanish residents to have money retained in the housing market. The idea behind this is to initially take more then what is need to ensure that all the taxes needed to be paid are covered and cleared with the amount retained. This happens with both selling and buying. When buying a property in Spain it is normal to be asked to give a bigger tax fund then is usually need. This is to allow time for the correct calculations of corresponding taxes as well as being able to gain ownership the moment you sign at the public notary. Usually the tax authorities take around 3 months to complete and what is left is returned to you. This is also the medium amount of time it will take for the deeds to be issued in your name and for you to receive them.
The same happens when you sell a house in Spain, but in this case you do not pay it directly like a buyer does. In this situation the buyer of the property withholds 3% of the purchase amount which the tax offices/public treasury retain until the correct taxes have been paid and accounted for. This is again around about the same time as the new deeds are issued. Once the tax authorities are satisfied that your taxes are cleared, then you are able to claim the remaining amount back. It is the buyers or real estate’s responsibility to make this payment of the 3% to the treasury.
It is a good idea to keep on a representative in Spain to continue this final stage of the process, particularly if you are not going to be in Spain around that time. Not only should your legal and financial representation apply for a tax rebate, but they will be able to check that what was taken was in fact correct, and that the amount you will receive in return is just.
Tax returns will depend on different situations; if there was a loss from the sale of the property it is strongly advisable to submit an application for tax rebate to recuperate a good percentage or the entire amount. In the case of a profit, the taxes will be higher, but there should still be some money to return. The transaction will also have to be declared in the Annual National Tax Returns (la Renta in Spain) as income, in the country where you usually pay your taxes.
The forms you will need to present will depend on who is apply, whether you are residents, non-residents, an individual or a married couple, being both resident or non-residents.
ABAD lawyers and accountants have at their deposal the resources to complete this stage on your behalf, giving you one less thing for you to worry about.