If you are considering the possibility of selling a property, you have surely questioned what the cost will be for you and how much the Treasury retains for the sale of a property. These types of operations are not free: it is likely that a capital gain will be generated that you must include in your Personal Income Tax (IRPF) declaration, in addition to complying with certain taxes for which you will be responsible.
In order to clarify your doubts and so that you can make calculations with maximum precision, we review the taxes associated with the sale of a home one by one.
What are the taxes to pay when selling a property?
The costs related to the sale of a property are distributed in various categories (management, real estate, energy certificate, notary, registrar...), but, undoubtedly, the main component is linked to the taxes derived from the sale of a home.
In the case of the seller, there are three associated taxes: personal income tax, municipal capital gains (when it exists) and the Real Estate Tax (IBI).
How much is taxed to the Treasury for the sale of a home in personal income tax?
The capital gain generated by the sale of a property must be declared in your personal income tax if there has actually been an increase in assets due to the sale of the home. It is also possible to sell at a loss, in which case you must also reflect the operation in your income tax return, recording the capital loss from the sale of the property.
What rate applies to capital gains?
If you obtain a capital gain, you must incorporate it into the tax base of the savings, paying taxes as follows:
- At 19% for amounts up to €6,000
- At 21% in the range between €6,000 and €50,000
- At 23% for amounts between €50,000 and €200,000
- At 27% for amounts from €200,000 to €300,000
- From €300,000, a rate of 28% applies
If you obtain a capital loss, you will have the possibility of offsetting it with the capital gains corresponding to the same year, with certain limits, which will help reduce your tax burden for this concept. If there is still a negative balance, you can offset it over the next four tax years.
How to calculate personal income tax for the sale of a home?
It is crucial to know how the capital gain from the sale of a property is calculated. To do this, it is necessary to know the transfer value (subtracting all expenses and taxes paid with the sale) and the acquisition value (adding the expenses assumed at that time, including works and improvements).
The difference between the transfer value and the acquisition value will determine whether you have obtained a financial gain or loss from the sale of your property.
In relation to when you should declare the sale of a property in the Income Tax return, the answer is that you should always do so, whether there is a capital gain, a loss or if the operation results in a financial balance.
How to avoid paying the Treasury for the sale of a home?
If you are looking to avoid paying taxes to the Treasury for the capital gain in personal income tax derived from the sale of a home, here are some options you can explore:
- Take advantage of the exemption for reinvestment in your habitual residence.
- Take advantage of the exemption in the case of home sales for people over 65 years of age. It is important to keep in mind that it is not valid in the case of the sale of a second home for people over 65 years of age; It must be the main residence. This exemption is also applicable to individuals in a state of severe or high dependency. In both situations, you can benefit from this exemption, whether your habitual residence is transferred in exchange for capital, or if it is transferred in exchange for an income, temporary or for life.
- The delivery of a property as dacion en pago is also exempt, as is its transfer as a result of a foreclosure, whether by judicial or notarial means, intended to settle debts related to the main home.
How much is paid to the Treasury for the sale of a property in the municipal capital gains?
In reality, this tax does not end up in the hands of the Treasury, but rather in the hands of the local City Council. However, it is still an important tax duty that is necessary to know.
The municipal capital gain taxes the increase in value that the property has experienced during the time that you have been its owner, therefore, you will only have to pay it in those cases in which an increase in value has actually taken place (unlike previous situations).
How to determine municipal capital gains?
The calculation of municipal capital gains involves considering the cadastral value, along with the acquisition price and the sale price when determining the tax base. It is also necessary to know the type established by the corresponding city council.
You will have a period of 30 business days to make the payment of the municipal capital gain from the date of the transaction.
What is the IBI and who pays it when selling an apartment?
Regarding the Real Estate Tax, the regulations establish that its responsibility falls on the owner of the property on the date the tax accrues, that is, on January 1 of each fiscal year, corresponding to the calendar year.
However, it is common to agree on a distribution of the payment between the seller and the buyer, proportionally distributing their annual cost according to the date of the sale.
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