this you must complete tax form 212 and submit it to your Tax Office within 90 days of completion. The refund should be made within 90 days. In contrast, if your actual liability amounts to more than 3% of the sales price you must complete form 212 and submit it to the Tax Office along with the amount you owe.

There are a number of factors that can reduce the figure that the Inland Revenue considers as your net profit for the purpose of calculating Capital Gains Tax. Recent changes in Spanish legislation have complicated calculation of the reductions that are applicable, but the current situation for residents and non-residents alike can be summarised as follows:

If you had already owned your property for over 10 years on 31st December 1996, in other words you bought your property before 31st December 1986, you are exempt from paying Capital Gains Tax. If you are a non-resident who qualifies for this exemption your buyer will not be obliged to pay 3% of the purchase price directly to the Inland Revenue.
If you bought your property between 1st January 1987 and 31st December 1996 a reduction of 11.11% will be applied to your annual profits for each year of ownership after the first two years. So, if you purchased your property in 1989 the reduction will be applied for the period 1991 – 1996 which gives you a reduction factor of approximately 55%. Only the Inflation Correction Factor (Coeficiente de Actualización) will be applied for the following years.
If you bought your property after 31st December 1996 the calculation to find your net profit will be made as detailed above and no extra deductions will be applied.
This is clearly a complicated area and it is best to seek professional advice on your individual case.

2. Municipal Tax on Property Sales (Plus Valía):

This tax is paid to the local administration and is based on the increase in the value of the land since it was last sold. Logically, as the beneficiary of this increase in value, the seller usually takes charge of paying the Plus Valía. However, some Sales Contracts stipulate that the buyer is responsible for meeting this expense. This is an important issue during negotiations over the terms and conditions of the Sales Contract and it is essential to consult your lawyer before making any agreement on this point. If you finally agree to pay the Plus Valía you will find that it is based on the official value of the land, which is always lower than the actual market value. The tax is charged at between 10% and 40% of the annual increase in the value of the land. The exact percentage depends on a number of factors including the location of the property and the length of time between sales. Local authorities periodically carry out valuations of land and maintain up-to-date records in order to calculate Plus Valía charges.