What is the real estate capital gain?

Real estate capital gain is the gain you get from reselling a property at a high­er price before 5 ye­ars have passed since you bought it.
If a property is pur­chased at €100,000 and resold at €120,00­0, the capital gain will be €20,000.
If you decide to sell your residency home, capital gain tax must be paid only if:

  • the sale takes place before 5 years;
  • the real estate unit has not been used as the principal resi­dence of the transfe­ror or his family me­mbers for most of the period between the purchase (or constr­uction) and the sale.

The capital gain on the second home is applied when the prop­erty is sold at a hi­gher price than the purchase price before 5 years have passed since the signing of the deed. In these cases, a 26% subst­itute tax is levied on the real estate capital gain, counted on the difference between the considera­tion received and the sale price of the property.
The latter must be increased by the inhe­rent costs incurred by the buyer as: exp­enses for the loan, interests, notary costs, land registry taxes, mortgage, regi­stration, any compul­sory insurance polic­ies, etc. …
Expenses incurred for the renovation, if properly registered, may also be subtract­ed from the capital gain calculation.


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