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14 April 2008

Tax rebate for investors in Spanish property

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by Gill Montia

Tax rebate for investors in Spanish property

British investors who have made capital gains when selling Spanish properties could be in line for a 20% tax rebate.

Spain changed its capital gains tax legislation last year, prior to which foreigners who sold property in the country were charged 35% on any capital gain, while Spanish nationals paid 15%.

According to Costa, Alvarez, Manglano & Associates, a firm of Spanish lawyers, the punitive rate for foreign investors was in contravention of the European Community Treaty.

Around 4,500 Britons are thought to have been involved in property sales under the old tax regime and the law firm estimates that they could reclaim a collective £50 million.

Residents of other European countries will no doubt also be taking action and those who are successful will be due interest on the illegally gathered tax.

However, the Spanish authorities will only be liable for claims that are made within four years of a sale.

It is understood that Costa, Alvarez, Manglano & Associates is offering a “no win, no fee” service to anyone who wants to make a claim.

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