If you are thinking of selling a property it is very important to know in detail the taxes on the sale of the house. As a rule, it is not mandatory for the seller to pay taxes on the sale of his home, even when it generates a profit. In some particular situations, however, those who sell the house pay taxes, for example in the case of inherited properties or when the transaction generates a capital gain.
The law provides for different rules according to various cases, including:
The type of building
Who lives in the property?
- The time elapsed since the time of purchase.
- The ways in which the owner came into possession.
In short, moving in the intricate bureaucracy of the sale of properties can create a lot of confusion. So let’s see together how to get out of this complex regulatory labyrinth and understand in what situations those who sell a house must pay taxes. At the same time you will also have to calculate the Estimate tax refund.
Taxes for those who sell their first home more than 5 years after purchase
When you sell your first home once 5 years have elapsed from the purchase, you have no obligation to pay income tax on the capital gain, or any other form of tax.
Even if you have taken advantage of tax breaks such as the first home bonus, you will not have to pay any tax on the sale of the house after 5 years from its purchase. The five-year expiry allows you to resell the property without losing the right to benefits or risking high penalties.
Taxes for those who sell their first home less than 5 years after purchase
Selling a house before 5 years, however, what taxes will it entail? Here, this is the case in which you will have to submit to the payment of tax if the sale will generate a capital gain that is when you are able to resell the property at a price higher than that paid at the time of purchase.
However, if the property meets one or more of the following conditions, you will be exempt from any form of taxation on the sale, even if it occurs less than 5 years after its purchase:
You as the owner (or your family members up to the third degree of kinship) have used the property as a main residence – or as a place of registered residence – for most of the period between the purchase and the sale;
- You have acquired the property by inheritance
- You received the property as a donation
For this last point it is necessary that more than 5 years have passed since the purchase or construction of the house, by the person who made the donation.