Selling Home: Fees and Taxes

Understanding the tax obligations associated with selling a property is essential to avoid unpleasant surprises in the deal. In this sense, we present a set of information regarding the fees and taxes payable on the sale of a house.

Understanding the fees and taxes associated in the sale of a home is essential, in order to consider all the costs involved in the process, both for the seller and the buyer side. 
In addition to concluding a successful deal, it avoids contexts of tension between the two parties. On the other hand, understanding all the information in advance of these obligations also helps in the elaboration of an accurate planning of all related costs. 
In this sense, we present a set of information regarding taxes and fees to be paid when selling a house, based on an article from Caixa Geral de Depósitos.

Selling a House: Fees and Taxes

1. Real Estate Capital Gains Tax

For sellers of their homes, it is crucial to pay attention to the capital gains from the sale, that is, the profit that will be made after the transaction is completed. 
In these situations, it is necessary to know that the State will tax 50% of the capital gains resulting from the transaction, which will be paid in IRS. 
In order to calculate the capital gains, it is necessary to understand that it is possible to deduct expenses such as construction costs, real estate commission, costs with the Energy Certificate, registration and deed of sale expenses, as well as benefit from exemptions.
Formula for calculating capital gains generated in your favor with the sale of a propertyCapital gain = sale value of the property – (acquisition value of the property x monetary coefficient) – charges with purchase and sale – charges incurred with appreciation of the property (in the last 5 years).
Note that in relation to the “monetary coefficient, the State publishes every year a table of the currency devaluation coefficients to calculate the purchase value adjusted to the year of sale.

2. Real estate agency commission

If the property is sold with the help of a real estate agency, a 5% commission (+ VAT) will be charged on the price registered at the deed. 
This value represents the average amount charged by real estate agencies.

3. Cancelling the mortgage

If you sell the house you bought with your mortgage, it is essential to cancel the mortgage, so that the house is unencumbered for the new buyer.
Here, the registration of the mortgage cancellation request is followed by the registration of the acquisition request by purchase and sale of that property and eventual constitution of a new mortgage, as referred to by the same source.
The cancellation is accompanied by a cost of 50€ at the Land Registry Office. It should also be noted that one should be aware of possible costs for making an early payment on the credit.

4. Expenses with documentation

Finally, regarding the documentation required for the sale of the property, it is essential to anticipate the following values:

  • Permanent land title certificate – 15 euros for each fraction (document valid for 6 months);
  • 2nd copy of the utilization license – from 35 euros (increases according to the number of pages);
  • 2nd copy of the house technical file – from 35 euros (increases according to number of pages);
  • Energy certificate – from 130€ (increases according to the area of the property).

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