Tax rebates are available on homes in Spain

Published 02nd Apr 2009

If you own property in the sun you could be entitled to reclaim money from Spanish government after landmark court ruling


Up to 10,000 Britons with homes in the sun could be entitled to reclaim more than £140m in overpaid capital gains tax (CGT) following a landmark court ruling.

Alan Roy, 65, and his wife Margaret, 63, from West Molesey, Surrey, have successfully claimed about £3,000 from the Spanish government after they were illegally charged more than twice the amount of CGT as Spanish residents.

“This is a great result,” Roy said. “But we’re just two in thousands of people who’ve been treated this way.”

Lawyers say the case opens the floodgates for claims. Currency specialist HiFX made a conservative estimate that Britons are each due £14,100 in overpaid CGT. Add to that interest of about 6% a year from when the tax was levied and those who made gains on Spanish property could be due almost £18,000.


The Roys bought a Spanish property for €150,000 in 2001, and sold it three years later for €160,000. They were charged the Spanish non-residents’ tax rate of 35% on the gain instead of the Spanish flat rate of 15%.

The European Commission ruled last year that the disparity between the rates contravened European Union legislation and that non-residents shouldn’t be charged extra.

A Spanish Court has now upheld the Roys’ claim for a 20% rebate, plus interest — avoiding a hearing at European Courts of Justice.

Emilio Alvarez of legal firm Costa, Alvarez, Manglano & Associates, which helped the couple lodge the claim, said: “We’ve won the first British case and are now able to help other British people reclaim money they were overcharged.”

However, under Spanish law, there is a limited window for registering claims, so those who sold properties before November 2004, and after the rules changed at the start of 2007, will not qualify.

Spanish courts are considering the cases of about 260 Britons and another 340 have registered their details.

However, up to 10,000 British people, plus thousands more in other European countries — collectively due an estimated £350m — are believed to be affected.

“It’s vital people come forward as soon as they can so their cases can be registered and put forward,” said Alvarez.

Meanwhile, tax officials here have ruled that foreign farmhouses should qualify for inheritance tax relief after two years.

Source: ' Times '

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