Hundreds of Irish citizens who sold holiday homes or investment properties in Spain before 2007 could miss out on refunds worth thousands of euro unless they lodge a claim before November.
In October 2009, The European Court of Justice ruled that Spanish authorities acted illegally by charging different rates of capital gains tax for non-residents selling property.
Spain corrected the anomaly by introducing a flat rate of 18 per cent on January 1, 2007 but thousands of EU citizens had already paid 35 per cent capital gains tax on properties sold before that date.
Those sellers could now be in line for a bumper cash windfall but claims have to be lodged within one year of the European Court’s ruling, which was officially published last November.
Irish bases Spanish solicitor, Alvaro Blasco, says preparing documents to lodge the claim only takes about two weeks but advises those looking for a refund to start the process before the end of this month.
Claims have to be made under Spanish law and the procedure could be complex, depending on where and when the property was sold and how the seller paid taxes.
“It could take between a few months and up to two years, depending on different factors” says Blasco. “The good news is that every single seller of a property in Spain before December 31st 2006 is entitle to a refund”.
It was initially thought that Spanish officials could circumnavigate the EU ruling though a domestic timeframe rule that meant that refunds had to be claimed within four years.
However, the European Court of Justice’s judgement ruled this out, meaning all sellers before 2007 are entitled to make a claim.
“The Spanish tax office is already paying out and has already accepted liability in hundreds of cases” Blasco continues.
“There should not be any legal costs, even in you lose”. To qualify for a refund sellers must meet the following criteria:
a) The property must have been sold before December 31st of 2006
b) The resident was not resident in Spain when you sold the property
c) The property was sold as individual and not as a company
d) There is evidence that the seller paid due taxes in Spain
e) Have a Model 212 form (a Spanish tax office form that shows the price of the property) or a Model 211 form
f) Have a photocopy of the sale or purchase deed (not needed if there’s a Model 212 form).
Blasco is already representing a number of Irish clients who are claiming a refund. His law firm practice in Kildare can be contacted on 01-5545711 or through his website at www.blascosolicitors.ie