Sale of a home will be included in the savings tax base

Determining the capital result derived from the disposal of real estate is a critical aspect of the income tax return. The correct application of the concepts of acquisition value and transfer value determines the amount of the gain or loss that must be taxed under Personal Income Tax (IRPF).

What the DGT has ruled

The Directorate General of Taxes (DGT) has specified the elements that must comprise both values for the calculation of the operation's result:

• Acquisition value: Includes the actual purchase amount, investments made, improvements carried out, and the expenses or taxes inherent to the purchase. Loan interest is expressly excluded.
• Transfer value: Corresponds to the actual sale amount, from which the inherent expenses and taxes paid by the transferor must be deducted.
• Inherent expenses: These are considered those directly related to the operation, such as notary, registry, management, or real estate agency fees.

The result of this operation, whether positive or negative, constitutes a capital gain or loss that must be integrated into the savings tax base.

What it means for you

If you are an individual selling a home, the calculation of your profit or loss is not limited solely to the purchase and sale prices. It is fundamental to account for all associated costs to avoid paying excessive tax or to correctly declare a loss. An error in including management fees, notary costs, or commissions can alter the savings tax base, affecting your final tax burden.

What you should do

To ensure the accuracy of your tax return, it is necessary to keep all documentation proving the expenses incurred. This includes invoices for professional services, deeds, and proof of payment of taxes related to the acquisition and sale. Each real estate disposal situation presents particularities regarding investments and improvements made, so it is necessary to assess each case individually to determine the actual acquisition value.