Britons Set To Gain Rebate On Illegal Property Tax

by Robin Pilgrim, LawAndTax-News.com, London

10 March 2009

Thousands of Britons who were illegally overtaxed as a result of selling properties in Spain are set to receive tax rebates totaling GBP140m after a couple won an appeal at the High Court in Valencia.

The British couple appealed against the 35% capital gains tax charge levied on the sale of their Spanish properties - a rate which is over double the 15% which Spanish nationals are required to pay on property sales.

Ruling in their favour, the High Court has deemed the 35% levy "unlawful", and has demanded that the Spanish government provide the British individuals who sold properties in Spain between July 2004 and December 2006 with the appropriate tax rebates.

It is thought that the ruling will affect up to 10,000 property investors, with each eligible for rebates of up to GBP14,000 (EUR16,000), which could end up costing the Spanish government around GBP140m (EUR156m).

The European Commission pressured the country's government to adjust the tax laws in December 2006. Prior to the recent High Court ruling, however, Spanish tax authorities had ignored requests for rebates from non-residents.

British property owners affected by the ruling are now being urged to contact the Spanish tax office to begin the process of lodging a rebate request.

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