Huge Spanish Property Tax Scam Exposed: EU Residents Who Sold Property in Spain May Be Owed Tax Rebate

photo credit: kozumel

If you’ve previously owned in Spain and sold your property between March 2004 and December 2006, you could be owed a 20% tax rebate. That’s the claim made by Spanish lawyers, Costa, Alvarez, Manglano & Associates (CAM&A) and currency exchange brokers HiFX who exposed a Spanish Government Capital Gains Tax scam last week.

CAM&A and HiFX revealed that non-Spaniards who sold their properties in Spain between March 2004 and December 2006 were charged an income tax rate of 35% on any capital gains. In contrast, Spanish nationals paid only 15%.

The two organisations say this excessive charge contravenes the European Community Treaty rules on discrimination and the Spanish Government should not have made the charge. As non-residents paid 20% over the normal limit, this equates to a total profit in the region of £37m.

It is not known exactly how many sellers are affected by the over-payment, as the Spanish Government are reluctant to reveal exact figures, but as Reuters reports,  estimates suggest about 4,500 British people could be eligible for a tax rebate in addition to residents in the other countries.

Emilio Alvarez, one of the Spanish lawyers, said, “Anyone who has sold a Spanish property between March 2004 and December 2006 will have been victim to this inflated capital gains tax (CGT) rate, which saw non-residents scammed into paying inflated CGT bills by as much as 20%. This tax trap is thought to have affected hundreds of thousands of people across Europe and in the UK.”

According to Emilio, a change in the law came into force in January 2007, which saw the capital gains tax for non-residents reduced from 35% to 15%, but it went largely unnoticed. “As a result, thousands of people who’d previously sold property in Spain are entitled to a 20% rebate, thought to average at £11,000 each including interest.”

Unfortunately, anyone who sold property prior to January 2004 has already missed the chance to claim back their tax money, as claims can only be made dating back four years.

HiFX and CAM&A are keen for all Brits affected by this scam to come forward. If you think you’ve been affected, you can find out more details on the Spanish Tax Reclaim website or by calling their helpline on 0845 680 3849.

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