The three primary cases for not having to pay taxes while selling a house in Costa Blanca is when the property owners are more than 65 years of age, lieu for payment, and when there has been some reinvestment towards the property.
There is no denying selling a property within Costa Blanca can be very profitable, a recent survey revealed that selling a house can fetch the seller at least 30% more than the buying price.
What we do when we sell a house is that we tend to focus our attention towards profit than paying attention to a bunch of expenses such as Income tax. Loan cancellation, tax related to capital gains, and Habitability certificate.
Income Tax is usually calculated on the personal income of an individual living in Spain, this income can come from real estate or from work. The income tax on sale of property in Costa Blanca comes under real estate. Tax paying individuals have to mention all purchase and sale transactions in their Tax Returns under capital gains.
The amount of tax to be paid will completely depend on the amount of money earned from the transaction. Make sure to include all the transactions like sales and purchase while filing in the income tax.
The tax will be applicable on profit earned which is as follows:
In This case if you sell a house and use the money to buy another primary property to live in then you will not have to pay taxes. For the new Property to be considered as a primary property, the property owner has to live in it for a period of 36 months. However, this may not apply.
It should also be noted that the reinvestment has to go through within a period of 24 months to avail this exemption.
You can avoid taxes if you hand the property to the bank in case you are not able to pay the mortgage, but you should make sure that you do not have any other house of high value that the banks can claim.
If The property owner is more than 65 years of age then the profit from sale of a house will not be taxable. They are also not required to reinvest the money in another property. This exemption is available for people who are very dependent.
You should also note that the sale of a secondary property will not be taxable if you utilize the proceeds to make an annuity.
Note: The most profit you can easily make is by selling a house in Costa Blanca, however for this, you will have to make a proper plan, do research and find a good property at a good rate.
