Monday, January 4, 2010

Spanish Tax Refund

Any properties sold in Spain must have Capital Gains Tax levied against the profit made on the purchase.

Previously there were 2 rates of CGT in Spain, 15% - Spanish residents, then 35% - non-residents.

This two tier system was changed in 2007 and exchanged for a single rate of 18% for both parties.

As mentioned in the previous post the Spanish High Court of Justice ruled in favour of a UK couple who argued that the tax law they had been at the end of were regarded as discriminatory.

On the This is Money site, they used an example given by Patricia Mock, from Deloitte, who stated "as result of this ruling, those who were charged at the 35% rate could be entitled to a refund of anything in excess of the 15% rate - in most cases this will probably be a large amount.'

As a working example, suppose you sold your property for €200,000 and the value of it had risen during the period you owned it by €100,000 then you would have faced a tax bill of €35,000. For more information on making a Spanish tax reclaim please follow the link provided.

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