Taxes when selling property

After the pandemic, many decided to change their housing or even move to another city. The decision to sell a home is the first step towards serious life changes, but in many cases sellers do not account for the taxes that must be paid when selling real estate.

Nevertheless, it is necessary to know about the taxes that are subject to payment and declaration to the tax authorities when selling a house. Some of them are paid directly upon sale of the property, while others are settled or distributed between the seller and buyer at the time of signing the transaction.

The main taxes are the municipal tax on land value increase (Plusvalía) and personal income tax (IRPF), although there are other expenses - IBI, utility payments and garbage collection tax.

3 taxes that must be paid when selling an apartment

Personal income tax (IRPF) when selling housing

Income tax, known as IRPF, is another tax that must be considered when selling real estate.

Unlike the municipal capital gains tax, IRPF is mandatory to include in the tax return for the year following the year of sale. The declaration must specify the capital gain from the sale of real estate. It is calculated as the difference between the price at which the property was purchased and the price at which it is sold.

If no profit is obtained from the sale, this is considered a capital loss, and it must also be indicated in the declaration. However, as a rule, it can be deducted.

There are exemptions that allow saving on income tax - for example, if the owner is over 65 years old or is a dependent. Also - if you plan to reinvest the profit in purchasing a new primary residence.

Annual property tax (IBI)

Property tax is paid annually for any type of property by the owner of the object as of January 1. In many cases, an agreement is reached with the buyer to split this tax, or it is included in the sale price.

This tax is also municipal in nature, so its conditions are determined by the city hall of the locality where the property is located.

Other expenses when selling real estate

When selling real estate, in addition to taxes, other expenses arise. For example, those related to the notary, registry, mortgage repayment costs or those that will have to be incurred to obtain the property without encumbrances (garbage collection tax, energy efficiency certificate, etc.).