Selling a property: taxes

Some tips to be prepared
22.08.2022 2 minuti di lettura

When you decide to sell a property you will face a number of payments, including state taxes. As seen so far, the real estate bureaucracy is complex and there are multiple alternatives. Let’s explore some common real estate sales cases. 

It's time to simplify 

To sell a house you will come across tax obligations, and being a topic already complex and difficult to deal with, making it straightforward and easy to understand for those who need general information is important. To do this it is essential to remove information that can confuse and simply outline the fundamental ones. 
The scheme below helps to clarify when you should or should not pay taxes during the property' sale:

  • The taxes are applying:
    1. when there is a capital gain from the sale of the property;
    2. if you sell the property before 5 years from purchase;
    3. when it has not been used as main dwelling by the owner or his household for more than half of the time between purchase and sale;
    4. if it was not received by donation or by inheritance.
  • The sale of real estate is not subject to taxes if:
    1. are sold after 5 years of purchase;
    2. are obtained by inheritance;
    3. are received for donation, after 5 years from the moment of purchase;
    4. are used as main dwelling by the owner or his family for more than half of the time.

Capital gain
The capital gain is generated when a property is sold at a higher price than the purchase price, generating a gain for those who sell it, now. If the property meets the following conditions, the gain will be taxed, if:

  • has been purchased by the seller for less than 5 years from the date of the deed;
  • has not been received by the seller by inheritance;
  • has not been the primary residential residence by the seller or his family. 

Primary home and second home
Those who bought the first house, almost certainly, enjoyed some tax breaks that made the buying process less expensive, saving on some purchase costs. The law on the purchase of the first house provides for, if you want to sell the property within 5 years of the deed, you must refund the tax breaks you have benefited during the purchase, paying interest and an additional penalty.

But, indeed, you can be exempted from paying these taxes if within a year from the purchase of a new property or a land on which it was built and used as a main dwelling, you have sold the first house. In this case you can continue to enjoy the tax benefits provided if the characteristics of the new house are similar.

Also for the second house the rule applies that if it has been bought for more than 5 years you will not have to pay any taxes, while if it was purchased for less than 5 years you will face taxes on the capital gain generated. 

As you notice, selling a property is not easy. Taxation, hidden bureaucratic quibbles and documentation are complex and delicate activities, if you do not know these issues perfectly, it is important to use professionals. For this reason it is crucial to contact a real estate agency that follows you in every sales step and suggests you how to juggle. 

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