Non-resident capital gains tax


October 20

Dear Sir or Madam,
I bought a villa in Moraira at the express wish of my dying wife of 40yrs who had just been diagnosed with terminal cancer.
While we lived there, she wrote an article for a religious magazine that it was the happiest time of her life.
We unfortunately were only allowed about a year before we had to return to England and I lost her.
Spain held too many memories for me good and bad so on July 14th 2016 I signed the villa sale contract and moved back to the UK.
The reason I am writing to you is to ask if any of your readers are aware that when you sell a property in Spain an amount of money (retention money) is held back by the Hacienda o Agencia Tributaria to cover any outstanding debts that you might leave behind.
I have every faith in my lawyer and she informed me that it could take up to 10 months before the money would be refunded. She knew as well as anyone in Spain that I didn’t owe anyone anything at all.
I was 63-years-old when I signed the sale contract and now 15 months later I am an old age pensioner of 65 years. I keep asking about the retention money and am told that the Hacienda are a law unto themselves and it could take up to 18 months before the money is repaid, but who knows because all we are told is that they are looking at my file?
I have just emailed an ‘Asesor’ in Moraira who managed all my tax affairs while I was in Spain. Someone else who knows that I have paid all my dues in Spain and do not owe anyone anything. I have ask if he knows anyone who works for the Hacienda who could throw some light on to the reason why it is taking so long to refund my money?
In England, this would be called a scam and I think it needs looking into and I think your readers would be very interested to hear the story. I also think if this practice was widely known it would put many people off buying a property in Spain!
I don’t know where else to turn for any answers but I know when journalists start asking questions things start to happen, so I am going to hope that this human-interest story is of interest to you and your readers and I am here, willing and able to supply you with any other information you may require.
I hereby give you permission to approach the people I have mentioned in this email.

Kind regards
Mike Hickson

Mr Hickson.
We passed your case onto our legal advisor Webster Asesores. Here’s their reply:
When a non-resident property owner sells the property in Spain, the buyer is obliged by law to retain 3% of the sale price AND deposit this amount with the Spanish tax office.
In your letter, you mention that it is for the payment of any outstanding debts. This is not correct. This 3% is considered to be a payment on account of any Capital Gains Tax – not any other debts.
If the 3% is higher than the tax due, you should apply for a refund of the difference. If the tax is higher than the 3% that has been retained, you have to pay the difference.
However, sometimes the fact that the vendor may not have paid the non-resident tax (form 210) can delay matters. It has been known that the tax office deducts any tax that may have not been paid before the make the refund.
Once the capital gains tax forms have been filed, it can take up to 12 months for the refund to be completed.

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