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Race for tax rebate on homes in Spain

IRISH investors in Spanish properties face a race against time to claim a tax rebate of nearly €20,000.

They are in line for the lump sum after being illegally overcharged by the Spanish authorities on the sale of holiday homes. The deadline to reclaim the overpayments is October 31 of this year.

It comes after a European Court of Justice (ECJ) ruling last year upheld an appeal by a British couple against the amount of tax they had to pay.

The elderly pair had been ordered to pay more than twice the rate of Capital Gains Tax (CGT) applicable to Spanish residents.

Before January 2007, the CGT rate in Spain for non-residents selling homes was 35pc.

It was less than half -- 15pc -- for Spanish residents who had owned their property for more than a year. However, the policy had led to complaints by non-residents who had bought Spanish properties.

The ECJ ruled that the higher tax rate broke European Community rules on discrimination.

The European Commission had challenged the tax rules in Spain, arguing they were discriminatory.

Since the start of 2007, the Spanish authorities have levied the same 15pc tax rate on residents and non-residents.

It is not known how many Irish people are entitled to the rebate but up to mid-July more than 500 British people had made claims.

They have received an average of around €18,246.06 each from the Spanish Tax Office.


The tax, which is believed to have made around €426m for the Spanish government, was originally exposed by Spanish lawyers Costa, Alvarez, Manglano & Associates and currency specialists HiFX.

Mark Bodega, director of HiFX, said it helps hundreds of people move to Spain every year.

"We were contacted by Costa, Alvarez, Manglano & Associates about this illegal charge in 2008, and have worked with them to publicise the ECJ ruling as much as we can," he added.

He advised anyone who thinks they might be eligible for a claim to go to the Spanish Tax Reclaim website.