Very often house sellers make a profit when they sell their property. This increase in value of the property between the purchase price and the selling price is called Capital Gain and it is taxed!!!
When you pay
A capital gain tax arises when a property has been built or bought within the last five years.
- Properties obtained through inheritance or adverse possession.
- Properties received as a donation, after five years from its purchase or construction.
- Properties that have been registered as the main house of the vendor or their family members for most of the period between the purchase/construction and the sale.
How you pay
- As a direct tax, according to the seller personal income tax rates.
- As a 20% of the capital gain, paid to the notary at the moment of the sale.