What taxes do you pay when selling an inherited flat?

Question

José Manuel Alburquerque · Accepted Answer

The heir who sells pays income tax on the gain, which is the difference between the sale price and the value declared on inheriting, adjusted for certain expenses. The heir also pays the “plusvalía municipal”, the municipal capital gains tax. If the heir paid less tax on inheriting because it was the deceased's home and sells it within five years, they generally have to pay back that saving. Income tax The costs of the sale, such as the estate agent's fees or municipal capital gains tax, are deducted from the sale price. The value declared for the “impuesto de sucesiones”, the Spanish inheritance tax, is also deducted, plus the taxes and the notary and registry fees paid on inheriting. That is why declaring the flat at a very low value in the inheritance can prove expensive when it is sold. If there are several heirs, each declares their own share. No tax is paid on the gain if the flat was the heir's own principal residence and the money is reinvested in another one, or if the heir is over 65 and lived in it. It is not enough that it was the deceased's home. The gain is added to the interest and other gains for the year. The heir pays 19 % on the first 6.000 euros and 21 % up to 50.000. Above that, the rate rises in bands up to 30 %. For example, an heir declared the flat at 200.000 euros and sells it two years later for 230.000. With 6.000 euros of selling costs and 2.000 of inheritance costs, the gain is 22.000. If the heir has no other gains or interest that year, they pay about 4.500 euros in income tax. Municipal capital gains tax It is paid by the seller and depends on the value of the land and the number of years since the relative's death. Selling soon does not always work out cheaper. If the sale price is the same as or lower than the value declared on inheriting, it is not payable, although the town council must be notified. If less tax was paid because it was the deceased's home In Catalonia, the 95 % allowance for the deceased's home requires it to be kept for five years from the death. If it is sold earlier, the tax that was not paid must be paid within a month, with interest. This is not necessary if, within the following six months, all the money is used to buy the heir's own principal residence or to pay off the mortgage on it.