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  • All
  • Grupo pisos
    • Duplex Apartment
    • Duplex Penthouse
    • Semi Attic
    • Apartment
    • Duplex
    • Studio
    • Flat
    • Ground floor apartment
  • Building
  • Business Premise
  • Garage
  • House
  • House with land
  • Industrial Unit
  • Luxury Villa
  • Plot of land
  • Rustic Land
  • Rustic property
  • Single family house
  • Solar house
  • Terraced house
  • Urban Plot of land
  • Villa
  • Village house
News
How is the sale of a property taxed in my income tax?
 03

  AUG

How is the sale of a property taxed in my income tax?

The sale of a home must be included in income tax as it is subject to income tax on the capital gain made. For people residing abroad, please read our article on taxes for foreigners.

-> Capital losses are not taxed, but must be declared and can be offset against other capital gains.

 

The gain is determined by the difference between the transmission and purchase value. In other words, the difference between the price it was sold at and the price it was bought at.

 

The ACQUISITION VALUE is made up of:

+ the actual amount (value that appears in the certificate)

+ the cost of investing and improving the property purchased

+ the expenses and taxes associated with the acquisition (ITP, VAT, inheritance tax, commissions)

+ tax-deductible depreciation

 

TRANSFER VALUE

+ the actual amount (value that appears in the certificate)

- the expenses and taxes associated with the acquisition (community payment plus value, commission to a real estate agency, ...)

 

-> TRANSFER VALUE - ACQUISITION VALUE: CAPITAL GAIN

 

It should be noted that only transferred properties that were acquired before December 31, 1994 can apply the transitional regulation to the income.

 

- Taxation -

 

Capital gains and losses are taxed for income tax as income from savings at a progressive rate. Taxed at the fixed rate:

 

19% up to € 6,000

21% from € 6,000 to € 50,000

23% between € 50,000 and € 200,000.

 

With the approval of the new general budget for 2021, the asset gain from the sale of a house includes a new tranche of 26% for profits of more than € 200,000.

 

- Tax reductions / benefits -

 

Here are the most important

 

- Reinvestment of the tax received in a new habitual residence:

If the entire amount is reinvested in a new home, you are exempt from tax on the part of the profit that is intended for the purchase of another home. If all of the money made on the sale is used to buy a new home, the exemption is complete. The term is two years from the time you sell your home in order to reinvest the money in another property and benefit from the exemption. The tax return must expressly state that and to what extent you want to take advantage of the tax advantage.

 

- Abolition of the coefficients:

From the 2015 financial year, the coefficients for updating the acquisition value of real estate that are not used commercially have been eliminated.

 

- Pensioner:

Taxpayers over 65 years of age do not have to pay tax on the profit they make from selling their main home when selling their home. In this case, the law doesn't require you to reinvest the money in another home in order to qualify for the exemption.

 

If you would like further information from I-VEO, we will be happy to advise you.

 

- Municipal capital gains -

 

Finally, you need to take into account the capital gains (Plusvalía municipal) from the sale of the apartment. This tax is levied on the increase in value that the home has experienced over time. The calculation is based on the cadastral value of the property's land and the number of years the apartment has been owned. The prices at which we bought or sold the house are not taken into account, our real estate experts at I-VEO will help you calculate how much you will pay for the municipal tax.

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