Spanish holiday home owners could receive tax rebate

The European Court of Justice has decided this week that the Spanish government had been discriminatory by charging different rates of capital gains to Spanish citizens and to non-nationals.

The decision means that hundreds of Brits that bought or sold a holiday home in Spain before 2007 could be entitled to a tax rebate of up to 20 percent plus interest on any capital gains tax that were paid.

The European Commission ruled that the Spanish rates of capital gains tax which were set at 35 percent for non-Spaniards and 15 percent for Spanish citizens was a restriction on the free movement of capital resulting in a breach of EU law.

The exact procedures for claiming a rebate are still to be agreed but the news will be welcomed by many Brits that have purchased holidays homes in popular areas. Hundreds of Brits own apartments in the Costa del Sol and those who bought or sold before the end of 2006 will now be line for the rebate.