If during the 2023 tax year you sold your real estate property, it is essential to reflect this transaction in your income tax return for the year 2024. The window to make this declaration opens next April 3 and concludes on July 1.

Most of the income generated must be accounted for during the Income Tax Campaign. One of these incomes corresponds to the capital gain derived from the sale of a house. Depending on the particular situation, the age and the amount obtained, a Personal Income Tax (IRPF) withholding rate will be applied. Here we provide you with detailed information on how to deal with the sale of a property in your income tax return.

How does the sale of a home affect your income tax return?

The first thing to do is to calculate the capital gain obtained in the transaction. To do this, the acquisition price of the property is subtracted from the transfer value of the property, i.e., the sale price.

Transmission value

This value refers to the net gain on the sale of the property and includes the sale price of the house, the expenses associated with the transaction (such as notary fees), the taxes paid on the transaction and any real estate commissions.

Acquisition value

Acquisition value, on the other hand, refers to the total investment made in the home from purchase to sale. This includes the purchase price of the home, the expenses and taxes associated with the purchase, the costs of renovations or repairs, and the balance of the mortgage.

Tax implications of the sale of a home

If you have made a profit on the sale of your home, you will have to apply an IRPF withholding rate, which varies according to the amount of the capital gain. For example, for the year 2024, these are the applicable withholding brackets:

- Profit up to 6,000 euros: 19%.

- Profit between 6,000 and 50,000 euros: 21%.

- Profit between 50,000 and 200,000 euros: 23%.

- Profit between 200,000 and 300,000 euros: 27%.

- Profit over 300,000 euros: 28%.

For example, if you bought a house for 100,000 euros and sold it for 150,000 euros, with a capital gain of 50,000 euros, you will have to apply an income tax withholding of 21% on that amount.

Inclusion in income tax returns

The capital gain or loss derived from the sale of a house must be declared on page 15 of the tax return. In box 1817, the type of asset involved (in this case, a house) is specified, together with the cadastral reference in boxes 1819 to 1821. In addition, the dates and values of transfer and acquisition are detailed in boxes 1826 and 1830, respectively.

Exemptions and special considerations

Some special cases may be exempt from taxation on the sale of the home, such as the sale of the primary residence by persons over 65 years of age or in a situation of severe dependency, as well as the reinvestment of the money obtained in the purchase of another home.

Payment to the Treasury

The payment to the Treasury is only made if a profit has been obtained with the sale of the property, but it is necessary to report the operation even if a loss has been registered. The amount to be paid will depend on the capital gain obtained and the IRPF withholding brackets established for the income tax return corresponding to the year 2024.

‍