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EU refers Spain to court over "Discriminatory Property Tax"

Source: Europa.EU - Thu 25th Apr 2013
EU refers Spain to court over 'Discriminatory Property Tax'

The European Commission has decided to refer Spain to the EU's Court of Justice for discriminatory real estate tax rules that prevent non-residents from enjoying the same tax benefits as residents.

According to the Spanish legislation, capital gains from the sale of a permanent residence are exempt for tax if the money is used to buy another permanent residence. However, this provision only applies to Spanish residents, therefore discriminating against non-residents who can end up paying much higher taxes.

In practice if a person living in Spain sold its permanent residence to buy a new house in another Member State where he would move, he could be taxed on the capital gains made on the sale. Conversely if he had stayed in Spain and bought a new house there, he would not have been taxed.

The Commission considers that this is an obstacle to free movement of persons, workers and self-employed persons and therefore breaches the EU Treaties.

The referral to the EU Court of Justice is the last step in the infringement procedure.

Comment on this Story

Spain : In the EU only when it suits.
Robster - Sat, 27th Apr 2013
I remember the EU court of justice ruling that charging non-residents a higher rate of capital gains tax on the sale of their property was illegal. Like many others, we were due a refund of several 000. The ruling made no difference - we never received our refund - they simply refused to pay, claiming they couldn't afford it!!
Steve Laird - Thu, 25th Apr 2013

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