Capital gains tax if i sell my house.

Welcome to my “Capital gains tax if I sell my house”.

When buying a house or apartment you will face a lot of additional expenses at what it will cost you, so, the more information you have on these expenses, you can do a better planning of your purchase.

Expenses such as those that are generated by the acquisition of a mortgage loan, taxes, formalities and fees of the Notary, maintenance, moving, improvements and equipment that you will make to the property that you are going to acquire, et cetera.

On this occasion, we will talk specifically about the taxes that are generated in the purchase and sale of real estate for residential use, houses or apartments. Some levies will be paid at the time of purchase, others at the time of selling and others on a regular basis as long as you are the owner of the property.

It is important that you are aware of this since they are values of consideration that you must know in order to include them within your budget and also to take the necessary measures to be able to exempt them in the future, specifically speaking Income Tax.

1.- Property Acquisition Tax (ISAI). This tax is generated at the time of acquiring a property and will be paid by the buyer, it will be the equivalent of 2% of the value at which the property is registered. The Notary is in charge of withholding and knowing this tax and the payment you must do at the moment of signing the deed.

2.- Property Tax. This is another tax that must be paid by the owner of the property, it is municipal and must do it every year within the first two months. The amount of this tax will be the equivalent of 2 to the thousand and will be calculated on the basis of the cadastral value of the house or department.

3.- Income tax (ISR). The third and last tax is due at the time of selling the house, this tax will be paid by the owner, as its name says is the tax that is generated on the utility that you have the product of the purchase.

For this tax, in the case of house-room, the Ministry of Finance grants facilities for its exemption (not paid). Below we transcribe some paragraphs of this law so that you observe in which cases the exemption of this tax proceeds. (Law on Income Tax, articles 109, 129 and 130).

The income tax will not be paid for the income derived from the alienation of the taxpayer's house, provided that the amount of the counter benefit obtained does not exceed one million five hundred thousand investment units ($ 6,722,550) and the transmission is formalized before a notary public. For the surplus, the profit will be determined, where applicable, and the tax will be calculated. The calculation and entire tax corresponding to the provisional payment will be made by the notary.

The exemption provided for in this subsection will not be applicable in the case of the second or subsequent disposals of the dwelling made during the same calendar year.

The limit established in the first paragraph of this subsection does not apply when the alienator proves to have resided in his house room during the five immediate years prior to the date of his alienation.

The public notary must consult with the tax authorities if the taxpayer has previously alienated a dwelling house during the calendar year in question and, if the exemption is appropriate, will give notice to the tax authorities.

For the purposes of article 109, section XV, subsection A of the Law, it is considered that the house of the taxpayer also includes the surface of the land that does not exceed three times the area covered by the constructions that make up the house.

For the purposes of article 109, section XV, subsection A of the Law, taxpayers must prove to the public notary that formalize the operation, that the property object of the operation is the taxpayer's house, with any of the supporting documents that are mentioned below, provided that the address recorded in said documentation coincides with that of the address of the real property alienated:

I. The voter's credential, issued by the Federal Electoral Institute.

II. Proof of payments made for the provision of electricity or fixed telephony services.

III. The statements of account provided by the institutions that make up the financial system or by commercial houses or non-bank credit cards.

The documentation referred to above fractions must be in the name of the taxpayer, his spouse or his ascendants or descendants in a straight line.

In the event that when selling, the amount of deed is less than the value you wrote when buying, instead of profit you will have a loss so no tax will be generated.

It is important that immediately after you buy your house, the light and landline receipts remain in your name or your spouse,

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