The tax matters to know before a sale are few but important. Poor planning can leave you facing an unexpected tax bill.
Capital gains
If you sell a property within a set period of acquiring it, the difference between the purchase and sale price counts as a capital gain and is declared.
Beyond that period no such tax arises on a home. It is important to document the date of acquisition from the title record.
Indexing the purchase price
When the gain is calculated, the purchase price can be indexed for inflation. This indexing markedly reduces the taxable gain.
Documented costs such as the title deed fee on purchase, renovation work and commission can also be added to the cost base. That is why keeping the receipts matters.
Exemption and declaration
An annual exemption applies to capital gains; the part above it is declared. The return is filed in March.
Different rules apply to selling property acquired through inheritance or gift; those cases need a separate assessment.
Keeping the paperwork in order
Declaring the sale price at its true amount is both a legal obligation and a way of removing the risk of a penalty later.
We help you keep the documents of the sale together; you file the return with your accountant. This article gives general information and is not a substitute for personal tax advice.
Related sections of this guide
- How is a title transfer carried out and what does it cost?
- I want to sell my home: the process from start to finish
Terms from the glossary
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As Konutkent Gayrimenkul we run the sale of your property with you from start to finish: valuation, deed checks, listing, buyer meetings and the title transfer. You can ask your questions by telephone or fill in the application form.
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