The taxes you must pay after selling your property

When we sell a property, there are many doubts that assail us about the taxes we have to pay, and that is why with this article we will try to clear the most frequent doubts that usually occur in this type of operations.

Fundamentally, two taxes have to be paid, which are the Tax on the Increase of the Value of Urban Land, hereinafter the Municipal Capital Gain, and the capital gain or loss, in the self-assessment of the Income Tax of Physical Persons, that we will develop later.

It is also important to note that the Tax on Real Property, or better known as the contribution, must be paid at the tax level, by the taxpayer who is the owner on January 1 of the fiscal year that is intended to be collected, so that If I sell the property on January 20, 2019, I will have to pay the 2019 exercise, because I am the owner on January 1, and I pay the one for the whole year, except for agreements between the parties that determine another matter.

We will start with the municipal capital gain, a tax that is in question at this time, as a result of the various sentences that have been pronounced on it, but that in practice have not modified the Law of Local Haciendas, which is the law that Regulate the tax.

And it is that goodwill must be liquidated within 30 business days since the act is caused, and it must be liquidated at the town hall of the town in which the real estate is located. The basis used to perform the calculation is the cadastral value of the land, which is multiplied by the number of years that have passed since the previous transmission occurred, by a coefficient established by the Ordinance regulating the tax, and all for a tax rate that can never exceed 30% and must also be regulated in the Municipal Ordinance.

The controversy regarding this tax comes from the mathematical formula used and because in those cases in which there is no gain, that is, there is loss, the Constitutional and the Supreme understand that the tax should not be generated. But in practice you have to liquidate and pay. And depending on each case, we must resort. And for that you have to study each situation individually.

On the other hand, we find the capital gain or loss in the personal income tax. This means that if we sell this year, 2019, we must declare said sale in the year in which the transmission occurs, that is, the year 2019, so that we must declare it in the income of 2019. which is made in April , May, June 2020.

In this self-assessment, what we declare is the difference between the value for which we transmit the property, the value for which we acquired it in its day. From the benefit we pay between 19 and 23%, since it goes by sections.

We will add to the acquisition value all the expenses inherent to the acquisition, such as the notary, registration, and tax expenses, while the transmission value will be subtracted from the transmission costs such as the payment of goodwill or commissions to real estate. To the result of subtracting the sale value from the acquisition, it is to which we apply the following scale:

The first 6,000 euros at 19%.
Between 6,000 euros and 50,000 at 21%
Above 50,000 euros at 23%.
It is important to individualize each specific case again, since if what we sell is a habitual dwelling, and the amount that is taken out for the sale is destined to the acquisition of a new habitual dwelling in a term not exceeding 2 years, we can apply the Exemption for reinvestment in habitual housing, and have this great tax benefit.

But it may also be that we sell and result in a loss, in which case it may be compensated with gains derived from the transfer of other assets in that year or in the following four provided that there are no changes in the regulations.