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What taxes do I have to pay if I sell one home to buy another?

Picture ¿Qué impuestos tengo que pagar si vendo una vivienda para comprar otra?

What taxes do I have to pay if I sell one home to buy another?

Do you want to sell one home and then buy another? This process involves the payment of many taxes that you will have to take into account. Well, when you pay the taxes you may not have the money you expected to invest in another property.

Here we tell you what taxes you have to pay if you sell a house to buy another one and its exemptions.

Taxes at the time of selling:

- Plusvalía in the income

This tax is declared on the basis of the equity increase in the value of what has been sold. In other words, the difference between the value you sell the property and how much it cost at the time the home was purchased, an amount that appears in the deeds. You are obliged to pay this tax when you have had a capital gain or a benefit from the sale, that is, a capital gain.

This tax is paid in three tranches in the IRPF. Up to 6,000 euros will be taxed 19%, from 6,000 to 50,000 euros 21%, and for amounts greater than 50,000 euros 23%. That is, if the sale of the house had a profit of 200,000 euros. You will pay 19% of six thousand euros; 21% of fifty thousand euros; and 23% of 144 thousand euros.

In which cases are there exemptions from this tax?

If the house you are going to sell is the usual one and you will reinvest in another habitual house or its rehabitalization. This tax will only be limited to the part of the capital gain that we do not use in the purchase of the other property.

In other words, if the gain is 200,000 euros, and you will only reinvest 150,000 euros, then you will only have to declare 50,000 euros of capital gain, based on the fixed table that we have explained before.

In order for you to use this exemption, you must purchase the other main residence within a period of no more than two years from the sale of the old home; and you must declare your intention to reinvest at the close of the fiscal year in which you sold the home.

Also exempt from paying tax on the sale of their habitual residence are people over 65 years of age or people in a situation of severe dependence or heavy dependence, as established by the Law on the Promotion of Personal Autonomy and Care for People in a Situation of Dependency.

- Municipal capital gain or IIVTNU

This is the Tax on the Increase in Value of Urban Land and is calculated on the basis of the increase in the value of the home, during the time it has been your property. It is municipal in nature, so the percentages will vary according to each city.

Is there any exemption from this tax? In a ruling handed down in July 2018, the Supreme Court has ruled that this tax will not be paid if the property has been sold at a loss.

- IAJD of mortgage cancellation (if any)

If you have a mortgage on the home you are selling, and you want to pay it with the sale of the home, then you will need to declare the Stamp Duty (IAJD) that decrees the end of the mortgage contract.

Things to consider:

Both the municipal capital gains tax and the stamp duty (IAJD) can be added to the costs of reinvestment in the purchase to deduct the capital gains obtained.

Taxes on the purchase

If the property you are going to buy is a new building, you will have to pay VAT, Value Added Tax of 10% of the purchase price. You will also have to pay Documented Legal Acts to register the property. This tax is between 0.5% and 1.5% of the purchase price.

But if the property you are buying is used, you will only have to pay the Transfer Tax, which varies according to the Autonomous Community.

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