Capital gains tax refund deadline set for Spain
Property owners in Spain who sold real estate between 1997 and 2006 have one month left to reclaim Capital Gains Tax illegally charged by the Spanish Government.
Lawyers say that even if owners have tried before and been unsuccessful it is worth trying again as the rules have changed and the average money recouped is over €18,000.
According to the Spanish Tax Reclaim Helpline hundreds of British owners have successfully recouped their money after it became clear that the Spanish government imposed a CGT of more than twice the amount paid by Spanish residents on properties sold.
The error, which was originally exposed by currency exchange brokers HiFX and Spanish lawyers, Costa, Alvarez, Manglano & Associates, resulted in British non residents paying 35% on any capital gains compared to a rate of 15% paid by Spanish nationals.
The legal firms says that this 133% overpayment not only totals a profit somewhere in the region of an estimated £350 million for the Spanish Government, but also contravened European Community Treaty rules on discrimination and therefore was unduly charged by the Spanish Government.
In November last year the European Court of Justice (ECJ) ruled in favour of claimants and extended the period in which people had sold a property and could successfully claim from between 2004 to 2006 to 1997 to 2006 meaning any UK or EU citizen who sold a property in Spain between 1 Jan 1997 and 31 Dec 2006 can claim.
Every seller could be entitled to reclaim whether they paid just the 5% withholding tax or the full 35% CGT. However the ruling also stated that all claims need to be settled by the end of October 2010 meaning sellers have just one month left to begin the three month claim process as August is a holiday month in Spain.
Those who have already attempted and failed to successfully claim can now resubmit their claim the firm added, as The ECJ has recently opened new legal actions allowing claimants to make a second attempt.
‘We have been fighting for the last two years to help British people reclaim the CCT that they were illegally overcharged by the Spanish government. At the moment every penny counts and a refund of over €13,000 could make a massive difference to Brits who have struggled with the increased costs of a property abroad and have been forced to sell up,’ said Mark Bodega, marketing director of currency specialists HiFX.
‘We estimate that there are still thousands of Brits who sold Spanish properties in the eligible time period who still haven’t come forward. But time is running out as once the deadline passes they will never be able to reclaim this money again. We now urge anyone else who thinks they may have been affected by this to come forward,’ he added.
Spanish Lawyer Emilio Alvarez said the firm has put forward over 520 reclaims to the tax authorities and to date have received over 200 rulings with a 100% success rate. Some 127 have received their money so far from the tax authorities.
He urged those involved in seeking specialist legal advice as it is not a simple case of filing your reclaim with the Spanish Tax Authorities.