For many years now, British people who received a Spanish property as part of an inheritance found themselves lumbered with a huge, unexpected, tax bill.
Now it is revealed that many of these home owners have finally received their refunds after a lengthy battle. As much as 3.3 million Euros have already been refunded in taxes which the homeowners should never have been asked to pay.
Barcelona-based law firm Spanish Legal Reclaims are handling the case for many Brits and they say there is another seven million euros of claims in the pipeline.
Furthermore, the company’s chief executive, Luis Cuervo, expects to file claims for a further three million euros over the next few years as new claimants come forward.
Sources suggest that up to 100,000 Brits could have been affected by the charges with up to 300 million Euros unnecessarily paid.
The Agencia Tributaria (tax office) applied the charges when a property owner died and passed the property to a family member of friend. The charge was also applied to lifetime gifts. In some cases, the tax amounted to almost a third of the value of the property or gift and it had to be paid in full within six months of notification. However, Spanish residents were exempt from up to 99% of the tax and paid little or nothing.
Because of this disparity the European Court of Justice deemed the charges unfair. It is discriminatory for property owners living in another EU country to be charged higher taxes than locals, and the court said victims of the charges should be repaid, with interest.
The authorities are now repaying an average of €30,000 per claim. The refunds are not automatic and those who think they have a case need to file a claim themselves.
“Anyone who paid the inheritance tax during the past five years can claim back all the tax that they paid – but doing so is a complex and daunting task only for specialised lawyers, experts in EU tax claims, as there is no single form to fill in,” said Mr Cuervo.
Finally, a win for foreign property owners!