Taxation for non-residents in Spain in the context of the sale and purchase of real estate covers various taxes and obligations depending on whether the property is being bought or sold, as well as other aspects such as whether the property is new or second-hand:

Tax obligations of the buying party: 

Value Added Tax (VAT) or Transfer Tax (ITP). 

Depending on whether the property is new or second-hand:

- New properties: Subject to VAT, which is 10% for dwellings (21% for commercial premises).

- Second-hand properties: Subject to Transfer Tax (ITP), which varies between 6% and 10%, depending on the autonomous community.

ITP (Impuesto de Transmisiones Patrimoniales) in the Balearic Islands is managed by the Tax Agency of the Balearic Islands and varies depending on the type of property and the value of the transaction.

The main characteristics of the ITP in the Balearic Islands are as follows:

Tax rate: The applicable rates vary depending on the value of the property. For example:

   - For real estate, it is usually progressive, with tax rates ranging from 8% to 11% for permanent dwellings, depending on the value of the property.

   - For furnitures, the general rate is usually 4%.

Deadline: The tax must be paid within one month from the date of purchase.

Tax obligations of the selling party: 

1. Capital Gains Tax on the sale: Non-residents who sell a property in Spain must pay tax on the capital gain obtained. This is calculated as the difference between the sale price and the purchase price, adjusted for certain expenses that could be deducted in the calculation, such as expenses derived from the purchase, expenses derived from the sale, as well as improvement works or extensions that have been carried out on the property. The deadline for submitting the tax return is four months after the signing of the public deed in the presence of a notary.

Tax rate: The capital gain is taxed at 19%.

- 3% withholding by the buyer**: If the seller is a non-resident in Spain, the buyer must withhold 3% of the purchase price. This withholding is a payment on account of the IRNR and must be paid within one month of signing the public deed of sale, by filing form 211 with the Tax Authorities. This withholding is deductible in the tax on the capital gain derived from the sale. If the withholding is higher than the final capital gains tax, the seller can request a refund of the excess.

2. Tax on the Increase in Value of Urban Land (IIVTNU) - Known as ‘plusvalía municipal’. This tax is paid by the seller and is based on the increase in the value of the land during the period of ownership of the property.

Expenses associated with the sale and purchase 

Non-residents must also take into account other expenses, such as:

- Notary and Land Registry fees: Expenses for the formalisation of the public deed and its registration. These will be paid by the purchaser.

- Gestoría: Fees for the management of the necessary formalities.

- Intermediary fees: Real estate agency commissions, to be paid by the seller.

- Energy efficiency certificate and certificate of occupancy: Documents required for the sale of the property and which will also be paid by the seller. These documents are valid for a period of 10 years, after which the seller must order an updated version for the sale.