Alistair Darling may not have wanted to draw too much attention to it, but some positive tax news for owners of holiday homes in Spain was buried away in the small print of his most recent Budget – and we think you’d lshould know about it!
The Budget stated that Britons with an unprofitable holiday home in an EU country outside of the UK (such as Spain) are now able to offset losses on their property against their earned income.
Until now, no British Spanish holiday home owners have been able to do this, but HM Revenues and Customs have at last admitted this discrepancy may have been unlawful, and are therefore allowing owners to offset losses going back 5 years.
However, you must act fast, as this tax break will be banned completely by the UK government in April 2010.
Apparently, you’ll be eligible to claim back your losses if you’ve had your property available to rent out for more than 140 days of the year, and have actually achieved 70 days worth of rentals in that year.
Another good thing to bear in mind is that if you use a property management company, all the payments you have ever made to them for their services should be claimable as legitimate expenses, provided you’ve been issued with legal invoices.
If you feel this situation directly affects you, and would like more information about it, we would urge you to contact your UK accountant or financial advisor as soon as possible.
Good luck and hasta luego!