Spanish tax reclaims for UK investors
The public began flocking to Spain around the 1970's. The package holiday made places such as the South of Spain an affordable holiday for hundreds of thousands.
Since then things have altered enormously and there are many British people that currently or have previously owned real estate in Spain. The attractions of a property in the Mediterranean have proven to be a winner in the UK.
It now seems that Spanish property buyers may be eligible to a refund of their Spanish Capital Gains tax. Consequently in the event that any of you sold a Spanish property in between January 1st 1997 and December 31st 2006 you may get a refund.
How is this possible?
A recent judgment by the European Court of Justice (ECJ) affirmed that non-Spanish residents have been unfairly charged 35% in Capital Gains Tax in comparison to 15% charged to local Spanish people. Because of that it's now possible to submit a claim to get the 20% difference back from the Spanish Tax authorities.
It is estimated that the home owners who sold since 1997 could possibly be credited an average 13,500 tax reclaim. As a result, previous Spanish home owners may just be entitled to claim a tax refund for missing interest at a rate of 6% from the date the reclaim is presented, which makes it feasible for the total reclaim to be even higher.
Commenting on the subject, Eduardo Fernandez Martinez, specialist in the Spanish Property Tax sector had this to say, "This is breaking news for the non-resident taxpayer.
The Spanish Tax Authorities have been completely overloaded with claims ever since the judgment of the ECJ. The actual result that it had been both discriminatory and also unfair to impose a larger tax percentage is both deserved and overdue. Non-residents will now get what is indebted to them for investing in Spain for years."
How do you qualify?
The qualification process is straightforward.
- You sold your Spanish home between January 1st 1997 and December 31st 2006.
- When you sold your property you were not a Spanish resident
- You have a copy of the purchase and sale deeds of your property
- You've got the Spanish Tax form Modelo 211 and / or Modelo 212
What to do now
There are a variety of organisations which are trying to help people facing this challenge. If you do meet the criteria, it is recommended that you do some investigation into your property and make sure you have all the mandatory documentation.
It's then a question of finding the right organisation to help you.
This article has been written by the author, Eric James. Should you require any moreInvestorsplease visit his Tax resources!
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