The sale of the property may require the payment of income tax. What are the taxation rules and how can this be avoided? We present a comprehensive guide.
Housing Sales Tax: erstwhile Is It Mandatory?
The profit on the sale of the property, if not exempted, is taxable in the form of individual income taxation (PIT) at a rate of 19%. taxation liability arises erstwhile the flat is sold within 5 years of its acquisition. This period shall be calculated from the beginning of the year following the date of acquisition of the property.
How do I calculate the tax?
The taxation is calculated as the difference between the selling price of the flat and the cost of obtaining income, which includes, among others, acquisition and renovation costs. It should be remembered that in the case of sale of real estate, there is besides a taxation on civilian law (PCC) of 2% on the marketplace value of the property.
PIT-39 Declaration
The sale of the flat within 5 years requires the submission of a PIT-39 declaration by 30 April of the year following the year in which the sale was made. This declaration shall show the income from the sale of the property and calculate the taxation due.
How to Avoid taxation Paying?
There are respective ways to avoid the request to pay income taxation on the sale of the apartment:
1. Sales After 5 Years
The easiest way to avoid taxation is to sale the flat 5 years after its acquisition. After this period, the income from the sale of the property is not taxable.
2. Housing relief
The payer may benefit from a housing allowance which allows for exemption from income taxation provided that the proceeds of the sale are utilized for their own housing purposes within 3 years of the beginning of the year following the date of sale.
What Spending Eligible for Relief?
Own housing expenditure includes:
- Purchase of another apartment, home or land for construction
- Repayment of mortgage credit for residential purposes
- Development or renovation of existing property
The payer must become a fully-fledged owner of the fresh property, which means that it must be entered in the land registry (for the primary market) or signed a notarial transfer contract (for the secondary market).
3. Sales for acquisition Price or Lower
In the case of sale of an flat within 5 years at a price equal to or lower than the acquisition price, the taxable individual is not liable to pay the taxation due to the fact that there is no taxable income.
ApartmentWhen Can You Not Take advantage of Housing Relief?
No housing relief shall be granted in situations where:
- Sales appropriations will be utilized to acquisition rental property
- Two or more properties will be purchased (e.g. 2 smaller apartments)
To benefit from the relief, the property must be intended for the taxpayer's own housing purposes.
Summary
A sales taxation for an flat can be avoided if certain conditions are met. The most crucial of these are the sale of the property 5 years after the acquisition or usage of the proceeds for own housing purposes. It is worth consulting the taxation advisor to realize the rules in force and to benefit from the taxation exemptions available.
Remember that accurate planning and cognition of regulations can aid avoid unnecessary costs associated with the sale of housing.
Continued here:
Tax on the sale of the apartment. How to avoid taxation?
