Do I have to pay personal income tax for the sale of an apartment that I inherited with my siblings? How much and when is it paid? If you have inherited an apartment from your parents along with your siblings and you have sold or rented it, a profit arises that must be entered in the income tax return. In this article we tell you how much is paid in personal income tax when an apartment inherited by several siblings is sold.
What taxes are paid for selling an apartment inherited by several siblings?
It is quite common that when several siblings receive an inherited apartment and do not want to rent it and none of them want to buy it, they decide to sell it to a third party. In these cases, a capital gain could be generated, so the taxes that levy that gain must be considered:
It is important to know that if several siblings inherit an apartment, it should not be declared in personal income tax unless it generates a capital gain from the sale or rental.
To determine how much is paid for each of the heirs in personal income tax, several factors must be considered:
The value for which the property is sold and the value for which it was acquired to know if there has actually been a capital gain. The acquisition value will appear in the Inheritance Tax declaration that was submitted at the time the apartment was inherited; and the transfer value will be the one set for the sale. The result of the difference will be the profit obtained from which all expenses paid for the sale must be subtracted.
Capital gain obtained and applicable percentage. In the event that several siblings have sold an inherited apartment in 2022 and have obtained a capital gain from the sale, they must submit the 2022 income tax return in 2023 and apply the following percentages based on the amount of the gain obtained:
From 0 to 6,000 euros: 19%.
Between 6,000 and 50,000 euros: 21%.
Between 50,000 and 200,000 euros: 23%.
Between 200,000 and 300,000 euros: 27%.
More than 300,000 euros: 28%.
It is important to remember that the scale is applied progressively, that is, for the first 6,000 euros 19% and so on.
Personal income tax is paid by each of the heirs based on the percentage of the property that corresponds to them. The moment in which it is paid is in the income of the year following the sale and it is possible to split the payment in two installments (60% of the amount in a first payment and 40% in the second payment).
In these cases there are no specific bonuses that can be applied to all heirs, but it is important to look on a case-by-case basis, because perhaps the exemption for reinvestment in a primary residence can be applied to one of the siblings.
Municipal capital gains
The capital gain is a municipal tax that taxes the increase in the value of the land and must be paid twice in the case of siblings who have inherited an apartment: at the time of inheritance and at the time of the sale of the property.
In the event of selling the inherited property, the brothers must consider:
The deadline to pay is 30 business days in most municipalities, although it is necessary to check the deadline to comply with it.
In 2021, the way of calculating municipal capital gains was modified, but in general the following elements must be considered: the acquisition value of the property, which is what appears in the Inheritance Tax, the transfer value and the date acquisition and transmission.
The payment of municipal capital gains can be divided into installments, but it is necessary to verify the conditions under which this fractionation can be made in each municipality.
The tax is paid jointly, so if one of the heir brothers does not pay, the corresponding City Council can request payment from the rest. To avoid this situation, it is usual to pay it immediately after the sale with the money received for it.
Frequently asked questions about an apartment inherited by several siblings
The inheritance of a flat by several siblings and the taxation can raise many doubts. We are going to answer the most common ones:
What happens if one of the siblings lives in the apartment?
It may happen that one of the siblings lives in the inherited apartment and, in this case, several solutions can be adopted:
The brothers reach an agreement on the distribution of expenses and do not sell the apartment.
The brother who lives in the apartment pays rent to the rest.
The brother who lives in the apartment buys it.
The apartment is sold to a third party and the brother who lives in the apartment evicts him or stays as a tenant.
If the brothers do not agree on what to do, a lawsuit may be filed and a judge will decide.
In which cases do you have to declare taxes on the inherited apartment?
The inheritance tax and the municipal capital gain must be paid for the inheritance. For the sale, personal income tax and municipal capital gains must be paid. And if the property is rented, the capital gain obtained from the rent will be included in the personal income tax.
What happens if I do not declare the profits obtained from the sale or rental?
If you inherit an apartment together with your siblings and declare the profits from the sale or rental, the Treasury may carry out an inspection and impose a penalty.
Can the apartment be sold by one of the brothers, even if the rest do not agree?
Conflicts between siblings when inheriting an apartment are common and it may happen that they do not agree and that one wants to sell the apartment and the rest do not. In these cases, there are several options:
Let the heir who does not want to sell buy the rest of the heirs’ participation in the apartment.
That the heirs who want to sell sell their share to a third party, which is usually a company dedicated to this type of operations.
Request a judge to divide the common property.
Example of an apartment inherited by several siblings and payment of personal income tax
Let’s start from the following assumption: three brothers inherit an apartment from their father in 2021. In the inheritance, the apartment is valued at 100,000 euros. They decide to sell it a year after it is inherited (2022) and they do so for a price of 150,000 euros, so there is a profit of 50,000 euros.
In the personal income tax that is presented in 2023, it will be taxed as follows:
The first 6,000 euros at 19% (1,140) and the remaining 44,000 euros at 23% (10,120 euros), total: 11,260 euros.
In short, if there is an apartment inherited by several siblings, it is essential to analyze how the sale or rental is taxed in personal income tax if a capital gain has been obtained. If you need help with an inherited apartment, contact us and we will help you with the procedures.
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