Non-Resident CGT Reinvestment Relief in Spain in 2026: When the 3% Retention Can Be Reclaimed and the Modelo 228 Refund Process

Capital gains reinvestment relief in Spain lets a seller exempt some or all of the CGT due on a property sale by channelling the proceeds into another primary residence. The relief exists in two forms under the IRPF law (Ley 35/2006): the Article 38 reinvestment exemption, available to Spanish tax residents who plough the proceeds into a new main home within two years, and the Article 37.1.h over-65 exemption, which wipes out the gain entirely with no reinvestment requirement. Non-residents face a narrower door: Disposicion Adicional 7 of the IRNR law extends the reinvestment exemption to EU and EEA residents, but non-EU sellers generally cannot access it on the same terms and pay the flat 24% IRNR. A binding DGT ruling of December 2025 (consulta V2467-25) confirmed that Beckham Law regime holders can also claim this relief. The 3% buyer retention at the notary applies in every non-resident case regardless of available relief, and the EU/EEA seller recovers it through the Modelo 228 refund process.

Who can claim the main-residence reinvestment exemption in Spain?

Spanish tax residents can exempt the capital gain on their main residence by reinvesting the full sale proceeds into another primary residence within two years of the transfer, under Article 38 of Ley 35/2006 (the IRPF law). The reinvestment can happen before or after the sale, in one payment or in successive instalments, and the new property must become the seller’s habitual residence. If the reinvested amount is less than the total proceeds, only the proportional share of the gain corresponding to the reinvested amount is exempt. The exemption is not automatic: the seller must declare the intention to claim it on their annual IRPF return (Modelo 100).

For non-residents, the picture splits by jurisdiction. Disposicion Adicional 7 of the IRNR law extends the reinvestment exemption to taxpayers resident in an EU or EEA member state with effective tax information exchange, effective for profits accrued since 1 January 2015. The sold property must have been the seller’s habitual residence in Spain, and the reinvestment can be in a property located anywhere in the EU or EEA, not only in Spain, a principle reinforced by CJEU case law on cross-border non-discrimination. The claim is filed on Modelo 210, and the 3% retention is reclaimed through the separate Modelo 228 refund procedure.

Non-EU or non-EEA non-residents generally cannot access the reinvestment exemption on the same terms. They pay the flat 24% IRNR on the full capital gain, and the 3% buyer retention at the notary still applies. UK sellers since Brexit fall into this category unless they hold EU or EEA tax residency elsewhere. Some double taxation treaties may provide partial relief in specific circumstances, but the domestic Spanish exemption is not available to them.

Seller status	Applicable tax	Reinvestment relief	Over-65 relief	Form
Spanish tax resident (IRPF)	IRPF progressive scale	Yes, Article 38	Yes, Article 37.1.h	Modelo 100
EU/Iceland/Norway non-resident (IRNR)	19% IRNR on capital gains	Yes, DA 7 of IRNR law	No (IRPF-only)	Modelo 210 + Modelo 228
Other non-resident incl. Liechtenstein (IRNR)	24% IRNR on capital gains	Not on same terms	No	Modelo 210

The IRNR rate distinction matters here. The Agencia Tributaria’s published rate table, last updated 18 June 2025, sets the general IRNR rate at 19% for residents of EU member states, Iceland and Norway, and 24% for all other non-residents including Liechtenstein. Despite Liechtenstein being part of the European Economic Area, the AEAT lists it separately at 24%, a nuance that affects how the reinvestment exemption interacts with the tax rate applied to any non-exempt portion of the gain.

How does the over-65 primary residence exemption work?

A seller aged 65 or over, or a person in a situation of severe or major dependency under the Spanish dependency law, pays no capital gains tax at all when selling their primary residence, with no reinvestment requirement. This is Article 37.1.h of Ley 35/2006, and the Agencia Tributaria confirms that the seller does not even have to declare the gain. The exemption applies whether the property is sold for a lump sum or in exchange for a life annuity, and it also covers the transfer of bare ownership (nuda propiedad) by an owner over 65 who reserves a lifetime usufruct.

The critical requirement is that the property must be the seller’s primary residence. For IRPF taxpayers, this means the property was their habitual residence at the time of sale or had been within the two years preceding the transfer. A non-resident by definition does not have their habitual residence in Spain, so the over-65 exemption is an IRPF provision that does not generally extend to non-residents under the IRNR regime. The one exception is a seller who was a Spanish tax resident, lived in the property as their main home, and moved abroad within the two years before selling: the property may still qualify as their habitual residence for the purposes of this exemption. This timing nuance is where tax-residency planning intersects with the sale decision, and it should be verified with a Spanish tax advisor before listing. The over-65 CGT exemption guide covers this provision in detail.

What is the two-year reinvestment window and how does partial reinvestment work?

The reinvestment window is two years, counted date to date from the transfer of the previous primary residence, per the Agencia Tributaria’s guidance on Article 38. The reinvestment can occur before the sale (if the seller bought the new home first) or after. If the sale proceeds are received in instalments under a deferred-price arrangement, each instalment must be reinvested within the tax period in which it is received.

Partial reinvestment triggers a proportional exemption. If a seller nets EUR 800,000 from the sale and reinvests EUR 600,000 in a new primary residence, 75% of the capital gain is exempt and 25% is taxable. The seller calculates the exempt proportion as the reinvested amount divided by the total sale proceeds, not the gain. This matters for sellers who use part of the proceeds for other purposes: retirement liquidity, a second property, or paying down non-property debt. Each euro not reinvested exposes the corresponding share of the gain to tax.

The Supreme Court ruled in STS 1230/2020 (1 October 2020) that the financed portion of the new property also counts as reinvested. A buyer who takes out a mortgage on the new main residence can treat the full acquisition cost, including the borrowed amount, as reinvestment for the purposes of the exemption. The seller does not need to use only the cash proceeds from the sale; the total acquisition value of the new property is what matters, whether financed or paid in cash.

Can a Beckham Law holder claim the reinvestment exemption?

Yes, according to a binding ruling published by the Dirección General de Tributos on 11 December 2025. Consulta vinculante V2467-25 resolved a question that had been uncertain since 2010, when a prior DGT consultation (V0384-10) took the opposite view and held that the reinvestment exemption did not apply to IRNR taxpayers.

The December 2025 ruling confirms that a taxpayer under the Special Expatriate Regime (Article 93 of Ley 35/2006, commonly known as the Beckham Law) can apply the primary home reinvestment capital gains exemption through Disposicion Adicional 7 of the IRNR law. The key legal reasoning is that the EU residence condition in DA 7 requires only residence in an EU member state, not ordinary IRPF taxpayer status. A Beckham Law holder is a Spanish tax resident taxed under the IRNR framework, but they satisfy the EU residence condition because they live in Spain, an EU member state.

Two practical points from the ruling matter to property owners. First, the amount to reinvest is the sale price net of the outstanding mortgage principal cancelled at the time of sale, not the gross sale price. Second, reinvestment in the new home can consist of both cash and a new mortgage: the financed portion also counts as reinvested, consistent with STS 1230/2020. The two-year window applies in both directions: up to two years before or after the sale of the old home. The non-resident income tax guide explains the broader IRNR framework that Beckham Law holders operate within.

Can a non-resident sell first and become a resident to claim the relief?

Tax residency status at the date of sale is what matters, not the date of the reinvestment. If a non-resident seller sells a Spanish property today, the transaction falls under IRNR (19% for EU, Iceland and Norway residents, 24% for others), and the DA 7 reinvestment exemption is the only relief path (and only for EU/EEA residents). Becoming a Spanish tax resident after the sale does not reclassify the transaction retroactively under IRPF.

However, a seller who plans ahead can change the outcome. If the seller establishes Spanish tax residency (183 days of physical presence in the calendar year, or Spain being the centre of their economic activity per Article 9 of Ley 35/2006) before signing the public deed of sale, the transaction falls under IRPF. Both the Article 38 reinvestment exemption and the Article 37.1.h over-65 exemption become available, and the 3% buyer retention does not apply because the seller is a resident. The tax residency 183-day rule guide explains the residency test in detail.

A worked example shows the difference. A 67-year-old British owner has lived in their Marbella villa as a holiday home for 15 years, spending 90 days a year in Spain. They are non-resident and outside the EU, so selling today means 24% IRNR on the gain, with 3% retained at the notary. If instead they move to Spain full-time, pass the 183-day test, and register the villa as their habitual residence, a subsequent sale would qualify for the over-65 exemption: zero CGT, no retention, no reinvestment requirement. The timing of the residency change relative to the sale is the lever, and it should be planned with a Spanish tax advisor well in advance of listing.

Does the 3% buyer retention still apply when reinvestment relief is available?

Yes, for non-resident sellers. The 3% retention is a collection mechanism under the IRNR regulation, not a tax in itself. The buyer calculates 3% of the declared sale price, pays it to the Agencia Tributaria at the notary, and files Modelo 211 within one month. This happens regardless of whether the seller intends to claim the DA 7 reinvestment exemption. The seller then files Modelo 210, claims the exemption, and requests a refund of the retained amount. The non-resident CGT guide covers the full retention and refund mechanics.

For EU and EEA non-residents claiming the reinvestment exemption, the Agencia Tributaria provides a dedicated refund form: Modelo 228, formally titled “Request for refund due to exemption for reinvestment in the main residence for taxpayers in the European Union and the European Economic Area with a tax information exchange system.” The form was approved by the Orden of 24 November 2015 and can be filed electronically through the AEAT sede electronica. The Modelo 228 is the specific mechanism for recovering the 3% retention when the DA 7 exemption applies, distinct from the general Modelo 210 self-assessment.

For resident sellers under IRPF, the 3% retention does not apply at all. The resident seller declares the gain on their annual Modelo 100 return, claims the reinvestment or over-65 exemption directly, and pays any balance due (or nothing, if fully exempt) through the annual filing. This is one of the structural advantages of selling as a resident rather than a non-resident.

Did the June 2026 AEAT order change the Modelo 210 filing process?

Orden HAC/623/2026, dated 12 June 2026 and published in the BOE on 23 June 2026 (BOE-A-2026-13573), modified the Modelo 210, 211 and 213 forms used for non-resident tax declarations. Several changes are relevant to non-resident property owners claiming the reinvestment exemption.

The order introduced a new mandatory deductible-expense breakdown annex for rental income declared on Modelo 210, and added new fields for the number of days and participation percentage for imputed income and rental properties. In the property transfer section (apartado H), the form now distinguishes between a “joint with spouse” and “individual” filing, and adds a field to clarify whether an amount is an improvement or a second acquisition. A new cadastral reference field was added to the property situation section. The “Fecha y firma” field was removed from the self-assessment form, and the address field was renamed to “current address in the country of residence.”

The filing deadlines for imputed income and rental income changed. For imputed income from urban properties and grouped rental income, the filing window shifts from 1 January to the first 20 days of April. For separately declared rental income, the deadline for the last quarter of 2026 also shifts to April. The new Modelo 210 form applies to self-assessments filed from 1 January 2027, but the new deadlines already affect income accrued in 2026. Non-resident sellers filing Modelo 210 to claim the reinvestment exemption should note that the form they use in 2027 will carry these new fields and deadlines. The selling property guide and the capital repatriation guide cover the broader sale process and the mechanics of moving proceeds out of Spain after the tax position is settled.

What are the practical steps to claim reinvestment relief as a non-resident?

An EU or EEA non-resident claiming the DA 7 reinvestment exemption follows a specific sequence. First, the sale completes at the notary with the 3% retention applied and paid by the buyer on Modelo 211. Second, the seller reinvests the proceeds (or the intended proportion) in a new primary residence within the two-year window, in Spain or another EU/EEA country. The full acquisition cost of the new property counts as reinvestment, including any mortgage financing, per STS 1230/2020. Third, the seller files Modelo 210 declaring the capital gain, claiming the proportional or full exemption, and requesting a refund of the 3% retained. Fourth, the seller files Modelo 228, the dedicated refund form for the reinvestment exemption, through the AEAT electronic headquarters. The seller must document the reinvestment: the new property’s title deeds, proof of habitual residence registration (empadronamiento), and evidence that the reinvestment occurred within the window.

The refund timeline for a non-resident claiming the exemption is typically 4 to 12 months with a Spanish tax representative appointed, and longer without one. The Agencia Tributaria’s Modelo 228 page was last updated 2 July 2026, confirming the procedure remains current.