When selling real estate, remember personal income tax.

In everyday life, real estate sales are rarely encountered by people. Therefore, the fact that the seller may have to pay the so-called capital gains tax after concluding the transaction and receiving the money still tends to cause surprise. When considering the sale of real estate, it is important to be aware of the cases in which this tax must be paid and also to be aware of its amount. Personal income tax in the amount of 20% when selling real estate must be paid from the positive difference between its purchase value (including investments made in the property, if any) and the sale price. For example, if the property was bought for EUR 85,000, investments worth EUR 5,000 were made in it and it was resold for EUR 100,000, then IIN in this case amounts to EUR 2,000 (which is 20% of EUR 10,000). However, there are three cases where this tax is not payable. For example, if the sold property was the taxpayer’s only property and another house was bought for its sale value (one year before or after this transaction), the said tax is not payable. Personal income tax when selling real estate does not have to be paid even in cases where the property has been owned by a person for at least five years and the specific person has declared this property for at least one year. The tax is not payable even if the property has belonged to the owner for at least five years and during the last five years it has been his only property. On the website of the State Revenue Service, it is also possible to familiarize yourself with an in-depth explanation of these cases.

See the full version of the article here.