Selling your house to buy another has a tax premium that many people miss out on because they don't know the rules.: the exemption for reinvestment in habitual residence. Well applied, means not paying personal income tax on the profit from the sale. Poorly applied—or applied without meeting the requirements—, means a liquidation of the Treasury years later. These are the rules of the game.
What exactly does it allow?
If you sell habitual residence and reinvest the amount obtained in buying (or build) another habitual residence, the capital gain is exempt from personal income tax in the proportion reinvested. Total reinvestment, total exemption; partial reinvestment, partial exemption. At a profit of 60.000 €, We talk about saving around 12.000 € or more.
Requirement 1: make it truly your habitual residence
The sold must have been your effective residence for at least 3 continuous years (except circumstances that force the change: job transfer, marriage, separation…). And there is a key nuance: You are considered to be selling your habitual residence if it was one at any time within the 2 previous years for sale — a respite for those who have already moved before selling. The new, in turn, must be effectively inhabited within a period of 12 months since purchase.
Requirement 2: the term of the 2 years
The reinvestment can be done in the 2 later years for sale or in 2 years previous (Yeah: It is also worth buying first and selling later, something common with new construction). If you buy off plan, The determining factor is that the legal acquisition—the delivery—fits within the deadline., so it is advisable to review the promoter's calendar before entrusting the exemption to a promised delivery.
Requirement 3: how much to reinvest
Not the profit: he total amount obtained on sale (discounting the canceled mortgage). If you sell for 200.000 € con 50.000 € of outstanding mortgage, The amount to be reinvested for total exemption is 150.000 €. If the new house costs less, the exemption will be proportional.
The special case: older than 65
If you have 65 years or more and sell your habitual residence, the profit is exempt without the need to reinvest in nothing. It is the rule that allows so many owners in the area to sell the large chalet, buy something comfortable and keep the personal income tax difference clean.
How to apply (and the typical error)
The exemption is recorded in the personal income tax return for the year of sale., expressing the intention to reinvest. Don't do it, or sell the new home before consolidating its habitual character, They are the errors that end up in parallel with the Treasury. Also remember that this exemption is from personal income tax.: the municipal surplus value It goes separate and has its own rules.
Are you thinking about moving house?? The first number you need is how much you will get for the current: we give it to you with a free valuation with real sales, and we coordinate your sale with the terms of your new purchase so that the exemption fits without scares. The two years go by quickly: better with calendar from day one.
