Post by asadul1717 on Feb 11, 2024 4:58:57 GMT -5
Selling a house or an apartment involves facing a series of procedures that should be known to avoid complications in the property sale process . The payment of taxes is part of these cumbersome procedures and non-compliance can cause serious problems with the Public Administration. Among the best-known taxes that must be paid are those corresponding to the Personal Income Tax, known as IRPF , and the Tax on the Increase in the Value of Urban Land, known as municipal capital gains . But are not the only ones. In the same way as these two charges, other taxes must also be paid when selling a house that are mandatory, such as the Real Estate Tax. Taxes paid when selling a house When a house or apartment is sold , the following taxes must be paid: IRPF – Personal Income Tax The Personal Income Tax (IRPF) is the most well-known tax, since we all submit to it once a year if we meet the requirements that make its presentation essential. Its calculation, in this case, is carried out based on the capital gain, if this exists. The payment is made at the time the income tax return is filed, just the year following the sale of the property.
The capital gain , which is what determines the payment of this tax, is what is obtained when there is an economic benefit from the sale of the property, that is, when it is sold at a price higher than the cost at the time of acquisition. Not only are the acquisition and transmission prices taken into account, but more complex calculations have to be made: we must Bahrain Email List determine the net acquisition and transmission values . Calculate the transfer value and the acquisition value To know the value of the transfer, the taxes and expenses that it may have caused to the seller must be subtracted from the total sale price, such as, for example, real estate agency fees . The acquisition value must also be determined. This is calculated by adding the price paid at the time of purchase, plus the taxes and expenses derived from said purchase. Investment and improvement works carried out on the property can be added to these expenses, but not mere repair and conservation works. In the event that the transfer value is greater than the acquisition value, it is considered that there is a capital gain and, therefore, the collection of personal income tax is applied.
This represents 19% on the first 6,000 euros of profit obtained, 21% between 6,000 to 50,000 euros, 23% when the profit is between 50,000 and 200,000 euros and, finally, 26% if there is a profit greater than 200,000 euros. Otherwise, if the acquisition value has been greater than the transfer value, a capital loss is not obtained but rather a gain . In this situation, the transaction must be declared, but payment of this tax is not made. Exemptions from paying personal income tax for the sale of a house Among the tax cases when selling a house, the cases exempt from paying personal income tax are the following: When the house or apartment being sold is the habitual residence and the money from the sale is going to be reinvested in the purchase of another home (in the next 2 years), which will also be the habitual residence. In the event that the money is not reinvested in its entirety, but only a part, the proportional part reinvested will be considered exempt. When the seller is over 65 years of age and sells his or her habitual residence, although the profit is not reinvested in a new habitual residence. In the event that the seller is over 65 years of age and the home sold is not his habitual residence, he will only obtain the exemption when the profit obtained is used to establish a life annuity with a bank or an insurance company.
The capital gain , which is what determines the payment of this tax, is what is obtained when there is an economic benefit from the sale of the property, that is, when it is sold at a price higher than the cost at the time of acquisition. Not only are the acquisition and transmission prices taken into account, but more complex calculations have to be made: we must Bahrain Email List determine the net acquisition and transmission values . Calculate the transfer value and the acquisition value To know the value of the transfer, the taxes and expenses that it may have caused to the seller must be subtracted from the total sale price, such as, for example, real estate agency fees . The acquisition value must also be determined. This is calculated by adding the price paid at the time of purchase, plus the taxes and expenses derived from said purchase. Investment and improvement works carried out on the property can be added to these expenses, but not mere repair and conservation works. In the event that the transfer value is greater than the acquisition value, it is considered that there is a capital gain and, therefore, the collection of personal income tax is applied.
This represents 19% on the first 6,000 euros of profit obtained, 21% between 6,000 to 50,000 euros, 23% when the profit is between 50,000 and 200,000 euros and, finally, 26% if there is a profit greater than 200,000 euros. Otherwise, if the acquisition value has been greater than the transfer value, a capital loss is not obtained but rather a gain . In this situation, the transaction must be declared, but payment of this tax is not made. Exemptions from paying personal income tax for the sale of a house Among the tax cases when selling a house, the cases exempt from paying personal income tax are the following: When the house or apartment being sold is the habitual residence and the money from the sale is going to be reinvested in the purchase of another home (in the next 2 years), which will also be the habitual residence. In the event that the money is not reinvested in its entirety, but only a part, the proportional part reinvested will be considered exempt. When the seller is over 65 years of age and sells his or her habitual residence, although the profit is not reinvested in a new habitual residence. In the event that the seller is over 65 years of age and the home sold is not his habitual residence, he will only obtain the exemption when the profit obtained is used to establish a life annuity with a bank or an insurance company.