Selling a property does not only imply receiving money in exchange for a house or a flat: there are also expenses. Among the main ones are taxes, which can sometimes represent a significant sum and, therefore, they should not be overlooked when assessing a possible transaction.
Free donation of a property to a son or daughter, do I have to pay too?
In these cases, the taxes that must be paid are three: the personal income tax (IRPF), the tax on the increase in the value of urban land (IIVTNU, although better known as municipal capital gain) and the real estate tax (IBI).
When are they applied and how is each one calculated? It is explained below.
Personal income tax, if there is capital gain
Personal income tax is one of the most well-known taxes for the common people, as it is applied on a large number of commercial operations. And the sale of a house or a flat is no exception. In this case, It is calculated based on the capital gain –If there is one– and it is paid with the income statement, the year following the transaction.
What is considered capital gain? Well, in essence, when the person selling the property gets a economic benefit with that operation. That is, when you sell it for more money than you paid when you bought it.
However, only the purchase and sale figures are not taken into account: the calculation is a bit more complex. On the one hand, you have to calculate the transmission value, which is the money that the seller will really have left at the end of the exchange.
To obtain this transmission value, the amount of the sale must be subtract taxes and expenses required by the operation itself, such as the aforementioned municipal capital gain (details of which are explained below), the real estate agency fees and the mortgage registration cancellation fees.
On the other hand, you have to determine the acquisition value. This is equivalent to the money that the now seller has paid at the time to buy the house, plus two additional amounts: the taxes and expenses of that purchase (attention: these expenses do not include commissions or mortgage interest) and the amount invested later on substantial home improvements.
And you also have to subtract, when calculating the acquisition value, eventual amortizations, such as tax benefits for having had the house or apartment for rent.
If the transfer value is higher than the acquisition value, it is considered that there was a capital gain and, in that case, IRPF applies. How much? 19% on the first 6,000 euros of profit, 21% on the tranche that goes from 6,000 to 50,000 euros, 23% between 50,000 and 200,000 euros, and 26% if there is a profit above that last figure.
If the opposite happens –that is, if the acquisition value was greater than the transfer value– there is no capital gain and, although it corresponds declare the transaction, will not imply the payment of this tax.
Remain exempt from income tax the cases in which:
– The house or apartment that is sold is the habitual residence and all money is reinvested in another home that will also be the usual one. If not all the money is reinvested but a part is, personal income tax will be taxed on an equivalent percentage of the capital gain.
– Whoever sells their habitual home is over 65 years old. In that case, personal income tax is saved even if you do not buy another home to make it the usual one.
– The seller is over 65 years of age and, although what he sells is not his habitual residence, he uses the money obtained to contract a life annuity.
– The flat or house is delivered as Settlement.
The municipal capital gain
The IIVTNU is applied by the municipalities (unlike the IRPF, which is state) on the increase in the value of the land during the years it has been owned from the person who now sells it. Hence it is called “surplus value”.
How is it considered that affects only the groundIt does not depend on the constructions or reforms that have been made on it, but on other factors, such as the cadastral value and the number of years the home has been owned.
But, in addition, the coefficients and percentages on which the final amount of this tax will depend. vary greatly from one town hall to another, and in general it must be paid within 30 working days following the signing of the deed of sale.
For this reason, it is advisable to consult the precise figures in the municipal offices before carrying out the operation, to avoid unpleasant surprises.
A failure of the Constitutional Court, issued in 2017, indicated that if a property is sold at loss –That is, if the acquisition value is greater than the transmission value– this tax should not be paid either, as is the case with personal income tax.
However, as explained by the financial comparator HelpMyCash, “almost all city councils continue to charge it“What they recommend from that firm is to first pay the tax, to avoid tax problems, and then start a claim process to try to get the money back.
The real estate tax
The third of the mentioned taxes, the IBI, is a municipal tax that actually it is paid every year for the mere fact of owning a house or apartment. In theory, whoever owns the home should pay it on January 1 of the current tax year.
The particularity in the case of a sale is that the amount of the IBI usually be shared between seller and buyer proportionally at the time that each one has owned the home during that year.
For example, if the sale closes on April 1, the seller will pay a quarter of the IBI and the buyer, the remaining three-quarters. This can be agreed and be included in the sale amount itself (which could affect, albeit to a small extent, the transmission value).
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