News Irish News

Saturday 10 December 2016

Investors may get €20,000 after villa tax gaffe

Dearbhail McDonald Legal Editor

Published 17/08/2010 | 05:00

HUNDREDS of Irish investors who sold holiday villas and apartments in Spain during the property boom may be in line for a tax rebate of up to €20,000 after being illegally overcharged by the Spanish tax authorities on the sale of their properties.

  • Go To

However, the deadline to reclaim the overpayments, October 31, is looming.

Last year the European Court of Justice (ECJ) upheld an appeal by an elderly British couple who were ordered to pay more than twice the rate of Capital Gains Tax (CGT) applicable to Spanish residents.

Before January 2007, the CGT rate on the sale of a home in Spain for non-residents was 35pc -- but only 15pc for residents had who owned their property for more than a year.

This policy sparked complaints from British investors who, like Irish nationals, had invested heavily in Spain.

Contravened

The ECJ ruled that the higher tax rate applied to investors who were not resident in Spain contravened European Community treaty rules on discrimination -- forcing the Spanish authorities to set up a fund to compensate those on whom the higher rate had been levied.

The exact number of Irish investors who may be entitled to the rebate is not known as the Revenue Commissioners does not keep records of foreign property owned by Irish nationals.

But legal experts here have warned that time is running out for Irish nationals, who must file their rebate claims by October 31, when the deadline for the settlement scheme expires.

"In addition to the forthcoming expiry date, the scheme is subject to strict rules on paperwork," warned Dublin solicitor Justin Lennon, the senior partner in one of a number of firms who have been assisting investors to reclaim their overpayments.

Investors with successful claims will also receive 6pc annual interest.

The European Commission challenged the Spanish rules, claiming they were discriminatory and, since the start of 2007, the Spanish tax authorities have levied the same 15pc tax rate on Spanish and overseas property owners.

Uptake of the compensation scheme by Irish investors has been low to date, in part due to concerns that investors may face further liability in Ireland on any capital gains they made on foreign investments.

Irish Independent

Read More

Promoted articles

Editor's Choice

Also in Irish News