Britons reclaim tax on Spanish property sales

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by Gill Montia

A group of British non-residents who sold property in Spain between June 2004 and December 2006 have begun their action to reclaim capital gains tax from the Spanish authorities.

During the period, British non-residents selling property in the country paid capital gains tax at the Spanish non-resident rate of 35%.

Currency exchange brokers HiFX and Spanish lawyers, Costa, Alvarez, Manglano & Associates have been instrumental in forming a collective action that is making a case to reclaim 20% of the tax paid, bringing it in line with the rate paid by Spanish nationals, at 15%.

For the group in question the higher rate contravenes European Community Treaty rules, meaning that the Spanish Government will be obliged to repay the difference.

An initial estimate put the average amount to be reclaimed per person at £11,000 but as Britons have registered their claims the figure has increased to over £19,300 per person or a collective £86 million (including interest).

People who sold property prior to June 2004 have already missed out because any claim needs to be made within four years of a sale.

So far around 300 Britons have registered to be part of the class action but HiFX estimates that 4,500 people could be eligible for a refund.