Archive:Spanish property tax reclaim

A court decision in Valencia Spain has opened the way for tens of thousands of European citizens to reclaim the overpaid tax they paid directly to the Spanish Authorities when they sold their homes in Spain. (this includes the Canary Island and Balearics)

The High Court decision, ruling in favour of a British couple, Mr and Mrs Roy, effectively means that the Spanish Tax Authorities are duty bound to repay the difference in the capital gains tax levied at 35%, when it should have be paid at 15%.

Law Change :

The law was changed after pressure from the European Commission, ruled that the Spanish government has unfairly charge Spanish Citizens a lower capital gains tax than other European citizens. This is against European Law.

Practical Implications :

Claiming the overcharged payments will not be straightforward. The Spanish tax authorities will not repay the overcharged tax easily, partly as it is estimated that it will cost them hundreds of millions of euros.

Firstly claimants must lodge a claim at their Spanish tax office. This is likely to be rejected, and the claimant has one month to appeal to an economic tribunal.

If that, too, rejects the claim, then there are only two months in which to start pursuing the issue through the courts, which involves employing a Spanish lawyer.

Failure to take make a claim to the tribunal, or an incomplete claim is likely to have the struck out completely.

In Spain there is also a four year limit on making tax reclaims, from the date the tax was paid, so any claimants need to make submit their claims within this time constraint.

There are several Spanish law firms that will submit a claim on a claimant’s behalf, with the law firm working on a No win No fee basis.

However the law firm’s commission if they are successful varies considerably.