If you are over 65 years of age and carry out a transfer of a property that generates an increase in equity, you may have the question of whether or not you should pay the municipal capital gains. In this post we analyze whether
those over 65 pay capital gains.
What is municipal capital gains?
The municipal capital gains is one of the taxes that is paid when a home is sold and taxes the increase in value experienced by the land where the home is built over time.
The capital gain
must be paid within 30 business days after the transfer of ownership.
Equity gain or loss in personal income tax and municipal capital gains
When a person over 65 years of age sells a property, several taxes must be declared, which are the following:
IRPF for capital gain or loss
The person over 65 who sells a property must include in his return for the year following the sale the
data on the capital gain or loss that he has had with said sale.
Capital gain is the difference between the transfer value and the acquisition value. To calculate these values, expenses and taxes associated with the sale must be considered.
A series of
percentages that vary from 19% to 26% depending on the amount of said gain are applied to the capital gain.
If there has not been a capital gain, but a loss, the person will not have to pay personal income tax, but they will have to include the details of the sale in the declaration.
In the case of those over 65 years of age, article 33.4 b) of the Personal Income Tax Law establishes that
they will be exempt from capital gains tax that are revealed on the occasion of the transfer of their habitual residence by persons over 65 years of age. years.
Therefore, if you are over 65 and you sell your habitual residence, you will not have to pay personal income tax, although you will have to file an income tax return.
Municipal capital gains
The Municipal capital gains (tax on the increase in the value of urban land – IIVTNU), as we have seen previously, is a
municipal tax that taxes the increase in the value of urban land that is revealed as a consequence of the transfer of a property (inheritance, donation and
purchase-sale ).
The
taxable subject in the municipal capital gains, according to article 106.1 b) of the Law Regulating Local Treasuries, is the one who transfers the real estate, therefore, in the case of the sale of a home is the seller.
The regulation of municipal capital gains does not contemplate that people over 65 years of age are exempt from paying the tax. Therefore, if they sell a property they will have to pay this tax, unless there are losses with the sale. In this case, the Constitutional Court has determined that the capital gains are not paid. However, in this case, the transfer carried out must be communicated and the deed of sale attached to prove that there has been no increase in value. The town hall will check the data and verify whether or not the capital gains have to be paid.
Methods for calculating municipal capital gains
Royal Decree 26/2021 established two methods of calculating the amount to be paid for the
municipal surplus value among which the taxpayer can decide to choose the most favorable. The methods are as follows:
–
The objective method. In this case the
value cadastral of the land is multiplied by the legal coefficient based on the period of time elapsed between the acquisition and transfer of the home.
–
The calculation method of real increase or direct estimate. It is applied when requested by the taxpayer. In this case, the percentage corresponding to the cadastral value of the land at the time of transmission is applied to the acquisition and transmission values. Subsequently, the difference of the values obtained is made.
Payment methods for municipal capital gains in Barcelona
To pay the municipal
plusvalía in Barcelona the following forms can be used:
– Through Internet.
– By calling the toll-free number 010 or, if calling outside the metropolitan area, by calling 931 537 010.
– Requesting a prior appointment at the OACS or at the IMH.
What other taxes must be paid by a person over 65 years of age if he sells a home?
In addition to personal income tax and municipal capital gains, when a property is sold by a person over 65 years of age, other taxes must be considered, which are the following:
– The Property Tax (IBI). It is a municipal tax that must be paid by the owner of the property on January 1 of each year. Therefore, if the house is sold on July 25, the seller must pay the IBI for that year. But, it is possible that the buyer and seller agree to the apportionment of the IBI depending on the time during which they own the property in that year.
– The IBI surcharge. This tax, also called metropolitan tax, must be paid when a home is sold in those municipalities that are part of the Barcelona metropolitan area and is intended to pay for services of that area.
Tips to save taxes on the sale of a home for people over 65 years of age
If you are over 65 years of age and have proposed to transfer a home that you own. You need to take several steps to reduce the tax burden of the sale:
– Consult with an expert tax adviser about the various possibilities for carrying out the transfer.
For example, instead of selling the home to a child, a gift or inheritance may be viable. It is essential to analyze each case and verify in which cases less taxes are paid.
– Perform the calculations on the cost of transmission.
It is important that, in addition to the taxes levied on the sale, a calculation is made on all transmission expenses such as notary fees or the cost of registration in the property registry.
– Request payment in installments.
This measure facilitates the payment of taxes such as personal income tax or municipal capital gains. In the case of personal income tax, you can request a payment divided into two installments. So you will pay 60% of the amount when the rental campaign ends and the remaining 40% in the month of November. To achieve the installment, you must check the corresponding box on the income statement and select the payment method you want to use. The municipal capital gains can be paid in various installments in some municipalities. But in the case of Barcelona, if it is an onerous transmission such as a sale, it is not possible to split the payment.
Therefore, the municipal capital gains are paid for those over 65 years of age. But they could be exempt from paying personal income tax for the capital gain obtained. It is essential that they seek advice and have the help of expert real estate consultants to carry out the sale efficiently and quickly.
