The Spanish Treasury has issued a statement to owners who have sold or are about to sell their homes, reminding them of the tax obligations they must comply with after the transaction.

The sale of a property entails a series of taxes that sellers must pay. The Treasury warns that failure to make these payments could lead to penalties.

Three key taxes: the Treasury says so.

The first of the taxes that the Treasury warns about, which the seller must consider, is the Property Tax (IBI). This municipal tax, which is usually paid annually, must be assumed proportionally between the buyer and the seller.

It will be done based on the time that each has owned the property during the year in which the sale is made. This means that if a seller has been the owner for more than half the year, he will be responsible for paying most of the IBI, and vice versa.

The second tax that the Treasury highlights is the municipal capital gains tax. This tax is levied on the increase in the value of the land on which the property is located from the moment of its acquisition until it is sold.

Those who sell their house have a period of 30 working days after the sale to pay this tax to the corresponding town hall. The Treasury stresses the importance of not forgetting this payment, since it is an immediate obligation. Failure to do so could give rise to interest and penalties.

Finally, those who have sold must pay attention to the Individual Income Tax (Form 100 IRPF). In the next Income Tax return, they must declare to the Treasury the capital gains derived from the sale of the property. That is the difference between the sale price and the purchase price.

If the seller has made a profit by selling their home, this will be included in the taxable base of the IRPF. On the other hand, if there have been losses, these may offset other capital gains, according to current regulations.

Recommendations from the Treasury

The Treasury insists that owners who sell their home be adequately informed about their tax responsibilities and consider seeking professional advice to avoid mistakes. Please do not hesitate to call us if you need assistance. These mistakes can be costly, both financially and in terms of time, as they can lead to fines, interest and other legal problems.

In addition, it is important to note that there are exemptions and deductions from the Treasury that can reduce the tax burden. For example, in certain cases, such as the sale of the habitual residence by people over 65 years of age or reinvestment in a new habitual residence, the seller may be exempt from paying part of the capital gains.

1. Exemption for reinvestment in habitual residence:

You may be exempt from paying taxes on the capital gain generated when you sell your habitual residence and reinvest the amount obtained in the purchase of another habitual residence, that is, the seller must have effectively resided in the residence for a continuous period of at least three years.

The amount obtained from the sale must be reinvested in the purchase of another habitual residence. This reinvestment must be made within a period of two years from the sale.

2. Exemption if age over 65:

If the seller is over 65 years old in the year the property is sold, the capital gains generated by the sale of the habitual residence are exempt from personal income tax.

3. Exemption due to disability:

The seller must have a degree of disability equal to or greater than 33%, or a degree of permanent disability that prevents the exercise of any work or activity (as established by law).

Deductions

Deductions in the personal income tax return are generally not applied as such to the sale of real estate, but it is important to take into account the following considerations:

Deductible expenses: You can deduct expenses related to the sale of the property, such as notary fees, registration fees, real estate agent commissions, and other expenses necessary for the transfer of the property.

Improvements made: Investments you have made in the property, such as renovations or improvements, may increase the purchase price for the purpose of calculating the capital gain.

Do not hesitate to check with us if you have any doubts on any of the three taxes to be paid. US Tax Consultants +34 915 194 392