Are you going to sell a house? Learn how to reduce the payment of capital gains

In recent times, the number of real estate deals is at a historic high since the value of real estate has been rising significantly and it is thought to maintain this level in the coming times. When selling a property above the purchase value can generate a tax payment by the owner of the same and many of them are unaware that there is a set of expenses that can appease or even cancel the amount to pay.
 

"The calculation of any capital gains, which are then included in the other income for the purpose of IRS, is made through the difference between the purchase value and the sale value, and the application of the coefficient of currency devaluation. It may also be determined between the amount of purchase and the amount of the tax net worth if the amount declared at the time of purchase falls below the assessment made by the Tax Authority for tax purposes. "
 

There is a set of expenses, which after the amount calculated, can offset the amount payable as long as the invoices / receipts of these expenses are presented (cost of deed and land registration - legal acquisition expenses). Considering that there are still other expenses that can make a difference in the amount to be paid, it is advisable to keep all invoices / receipts (maintenance and improvement of the property - painting or small arrangements to beautify the property within five years until the date of sale, request for energy certification - the cost varies according to the typology and square meters of the property, commission paid to the real estate agency, among others).
 

There is the possibility of canceling the tax amount. For this, the seller will have to apply the gain calculated, within 36 months - (amortization of any loan to the bank contracted for the acquisition of the property, purchase of other real estate - house or land, extension or improvement of another property, own permanent housing). "In order to safeguard the right to a total or partial reinvestment of the gain, the seller will have to report that intention in the income statement relating to the year of sale." Or, the seller will be exempted if, prior to the sale of the property, this have purchased another in the 24 months prior to the sale in question.
 

"The gain from the sale of properties acquired or inherited before 1989 is not subject to IRS taxation. In relation to cases after that year, whenever a gain arising from the sale of a property is determined, the acquisition value is restated by applying the currency devaluation coefficient, which depends on the year in which the property was acquired / inherited, according to ordinance 326/2017. "

 

Source: PUBLICO.PT