Post by asadul1717 on Feb 11, 2024 5:27:01 GMT -5
The capital gains obtained in the transfer of the habitual residence may be taxed in the seller's Personal Income Tax for up to 23% of the gain, but may be exempt when the total amount obtained from the sale is reinvested in the acquisition of another habitual residence or in the rehabilitation of that one.
Not paying personal income tax on a home sold
Let's remember the requirements and limits for said tax exemption to take place:
Sale of mortgaged home. When the taxpayer resorted to a mortgage loan to purchase his or her habitual residence, he or she may reinvest the amount of the net price obtained from the sale; that is, the price received minus the amount of the loan pending amortization.
Concept of habitual residence of the home sold Bahrain Email List For tax purposes, the building that has constituted his residence for a continuous period of at least three years is considered the taxpayer's habitual residence. However, it will be understood that the residence had the character of habitual residence, when, despite said period not having elapsed, the death of the taxpayer occurs or other circumstances occur that necessarily require the change of address, such as celebration of marriage, separation marriage, job transfer, obtaining first job or change of job or other justified analogues.
Concept of habitual residence of the purchased home . For the new home purchased to constitute the taxpayer's habitual residence, it must be effectively and permanently inhabited by the taxpayer himself, within a period of twelve months, counted from the date of acquisition or completion of the works. .
Deadline for reinvestment. The reinvestment of the net amount obtained from the sale must be carried out, in one go or successively, in a period not exceeding two years, counted from date to date, which may not only be those after the sale of the habitual residence, but also also the two years prior to it in the event that the purchase of the new home was made before selling the current one.
Partial reinvestment . In the event that only a part of the price obtained from the sale is reinvested in the purchase, only the part of the gain actually reinvested in the purchase will be excluded from paying personal income tax. In other words, if we have earned €100,000 from the sale, but we only allocate €80,000 to the purchase of the new primary home, we will have to pay personal income tax on a gain of €20,000.
Reinvestment for the purchase of an off-plan home. The Supreme Court has just issued a ruling stating that the period available to the taxpayer to reinvest the amount obtained from the sale of his or her habitual home, when the reinvestment materializes in the purchase of a home under construction, is two years. counted from the sale of your home, it is enough for you to reinvest the amount obtained from the sale within said period, without the need for you to acquire ownership of the new home or for its construction to have already been completed. For this reason, it is common for the buyer to prefer to advance payments to the developer before the two years from when he sold his house expire, to benefit from a greater tax exemption.
Not paying personal income tax on a home sold
Let's remember the requirements and limits for said tax exemption to take place:
Sale of mortgaged home. When the taxpayer resorted to a mortgage loan to purchase his or her habitual residence, he or she may reinvest the amount of the net price obtained from the sale; that is, the price received minus the amount of the loan pending amortization.
Concept of habitual residence of the home sold Bahrain Email List For tax purposes, the building that has constituted his residence for a continuous period of at least three years is considered the taxpayer's habitual residence. However, it will be understood that the residence had the character of habitual residence, when, despite said period not having elapsed, the death of the taxpayer occurs or other circumstances occur that necessarily require the change of address, such as celebration of marriage, separation marriage, job transfer, obtaining first job or change of job or other justified analogues.
Concept of habitual residence of the purchased home . For the new home purchased to constitute the taxpayer's habitual residence, it must be effectively and permanently inhabited by the taxpayer himself, within a period of twelve months, counted from the date of acquisition or completion of the works. .
Deadline for reinvestment. The reinvestment of the net amount obtained from the sale must be carried out, in one go or successively, in a period not exceeding two years, counted from date to date, which may not only be those after the sale of the habitual residence, but also also the two years prior to it in the event that the purchase of the new home was made before selling the current one.
Partial reinvestment . In the event that only a part of the price obtained from the sale is reinvested in the purchase, only the part of the gain actually reinvested in the purchase will be excluded from paying personal income tax. In other words, if we have earned €100,000 from the sale, but we only allocate €80,000 to the purchase of the new primary home, we will have to pay personal income tax on a gain of €20,000.
Reinvestment for the purchase of an off-plan home. The Supreme Court has just issued a ruling stating that the period available to the taxpayer to reinvest the amount obtained from the sale of his or her habitual home, when the reinvestment materializes in the purchase of a home under construction, is two years. counted from the sale of your home, it is enough for you to reinvest the amount obtained from the sale within said period, without the need for you to acquire ownership of the new home or for its construction to have already been completed. For this reason, it is common for the buyer to prefer to advance payments to the developer before the two years from when he sold his house expire, to benefit from a greater tax exemption.