Keeping bills for construction and other expenses can make a big difference in determining the tax payable.
Selling a property above the purchase value can result in the payment of taxes and many owners are unaware that there are a number of expenses that can reduce or even reverse the amount due.
The calculation of capital gains is determined by the difference between the purchase price and the sales value and the application of the currency depreciation coefficient.
From the calculated amount, it is possible to deduct the costs with presentation of invoices / receipts. First, the legal acquisition costs, such as the costs of the deed and the property registration. There are other expenses in the sale that can make a big difference, such as maintenance and improvement of the property, the requirement of energy certification in cases where it does not already exist, and the commission paid to the real estate agency if this is the case.
Owners often do beautification and maintenance of the property before they are offered for sale, but many do not realize that these costs - and all the other costs of maintaining and improving the property over the last five years - can make a big difference in the final costs.
There are no taxes to be paid if the seller, within 36 months, apply the gain calculated - deducted from the amortization of any loan contracted for the acquisition of the property -, opt for the purchase of another house, or land for the construction, or extension or improvement of another property, provided that it is destined for permanent permanent housing. You can also be exempt if you bought a property before the sale of the other, provided that the purchase occurred in the previous 24 months.
In order to preserve the right to full or partial reinvestment of the capital gain, the seller must take that intention into account in the profit and loss account for the year of sale.
The gain on the sale of real estate acquired or inherited before 1989 is not subject to IRS taxation.
Deco has a free-access simulator that can be useful to anyone who wants to evaluate what they can afford in the case of home sales. The currency depreciation coefficient is already included in this simulator and PwC simulations. For those who want to calculate the value themselves, the difference between buying and selling and the multiplication of the result is calculated using the devaluation coefficient of the currency defined for the year of purchase, which is published in Regulation 326/2017. Eligible expenses are then deducted. The tax is charged at 50% of the calculated final value.