Since January 2007 the rate of Capital Gains Tax on sales of Spanish property has been equalised at 18 per cent for both residents and non-residents. Before then, residents would typically pay 15 per cent, whilst non-residents paid a higher rate of 35 per cent. The change was demanded by the EU, as the previously unequal rates were felt to be a breach of the requirement for equal treatment of all EU citizens by member states.

Lawyer Fernando Aliaga of Aliaga Legal & Fiscal Services, based in Jávea, is confident of his ability to recover overpaid tax and is offering a no-win, no-fee service for eligible claims. "I am more than confident that we will get good results. We have studied the case carefully and in depth and in my opinion it is a matter of time. Although we cannot be sure of the court decree 100 per cent, I am very confident" he said.

On the prospects for anyone who has paid 35 per cent tax in recent years, he added: "The practical conclusion is that you may be entitled to get a refund of the surplus tax paid (20 per cent), plus interest."

The up-front cost of an application for a Capital Gains Tax refund is for a power of attorney to lodge the claim, the lawyers taking a 35 per cent success fee of whatever is recovered.

For example, an owner who bought a Spanish property in 2003 for 180,000 euros (including costs and indexation rate) and sold it last year for 340,000 euros could have had a tax bill of 56,000 euros, of which 32,000 euros could now be claimed as a refund. The final position will still depend on the individuals tax position in their country of residence.

For those who want to make the most of the lower Capital Gains Tax on Spanish property, Grupo Lar Sol is currently marketing the Doña Julia development (pictured) which will be built on the Doña Julia Golf Resort between Marbella and Sotogrande. There will be 65 exclusive apartments available and each terrace can be equipped with a Jacuzzi. The development also includes a private pool on the roof of every block. The two- or three-bedroom apartments, also come with large balconies, parking spaces in the basement and storage rooms. Prices start from 383,800 euros.

Tax information supplied by European VS

Read the latest Spanish Property Bulletin ezine FREE

Search and browse Spanish property

Request a FREE copy of World of Property magazine

Article first published 21 May 2007