Introduction
On November 10, 2021, Royal Decree-Law 26/2021 came into force, the echoes of which still resonate in the municipalities of Spain due to the novelties introduced in the municipal capital gains. This tax usually generates a lot of income for local administrations, and the legislative change is emerging as a turning point in this trend.
WHAT IS CAPITAL GAINS TAX?
Also known as the Tax on the Increase in the Value of Urban Land, the municipal capital gain is a tax that levies the increase in the value of urban land during the time during which it has remained in the property of a taxpayer.
The taxable event of this tax is the actual transfer of the property, that is, when the owner decides to sell the property or land in question, or when it is received as part of an inheritance or donation.
The complete definition of capital gains tax can be found in the text of the Local Treasury Law. In order for the tax to be applied, the value of the property has necessarily had to increase from the time of acquisition to the time of transfer.
CHANGES IN GOODWILL
It is precisely the condition of accrediting the increase in the value of the property over time that has been at the center of the controversy. Before this change, a ruling of the Constitutional Court of May 11, 2017, had already questioned the constitutionality of some provisions of the Law of Local Treasury.
The coup de grâce was dealt by this other judgment of the TC of October 26, 2021, where the nullity of the capital gains tax calculation method was declared, which gave rise to the legislative change mentioned at the beginning.
The main novelty introduced in the legislation consists of proposing a scenario of two options to calculate the tax liability, so that the taxpayer applies the one that is most beneficial.
On the one hand, it is proposed to multiply the cadastral value by new coefficients, designed to better adjust to real estate reality, and likely to be updated in successive General State Budgets.
On the other hand, there is the option of calculating the real profit resulting from the difference between the sale price and the purchase price of the home. If the taxpayer did not obtain any capital gain from the sale of the home, he would be exempt from paying the tax.
Regal Marketing Provides the best investment opportunity in Islamabad by introducing mega projects like kingdom Valley Islamabad, Silver City Islamabad, and Discovery Gardens.
The municipalities will have a margin of 15% to correct downwards the cadastral values of the land depending on their degree of updating, precisely to always guarantee the adequacy of the tax to the real estate reality in each locality and.
HOW DOES THE CHANGE IN CAPITAL GAIN AFFECT THE SALE OF REAL ESTATE?
The new calculation methods give disparate results depending on the time elapsed between the acquisition and the transfer of the property or land. The online real estate agency Doctor Property helps and advises individuals at all times in the process of selling real estate.
For example, owners who buy and sell within a period of less than a year will be the most affected, since the legislative amendment aims to penalize merely speculative real estate operations.
On the contrary, owners who acquired their properties in the midst of the bursting of the real estate bubble are expected to pay a lower tax, precisely because such a scenario is considered "not representative" of the reality of the real estate market.
Joseph Grinkorn is the successful businessman in New York.
He gives you the best tips towards manage your property and invest your cash with affordable plans.
Aaj Tak has quoted Mr. Ankit Kansal, Founder & MD, 360 Realtors on how commercial real estate is surfacing as an asset class with opportunities of good returns in this period.
Mr. Kansal has highlighted that due to a dip in the stock market currently prevailing, commercial real estate offers strong prospects.
This is characterized by potential rental yields of 6-12% & a consistent capital appreciation in the medium term.
He also further added that to capitalize on this trend, developers are also coming up with incentives which will encourage a larger volume of investors to step into the segment.Read Full Story Here: https://bit.ly/2XrlxXK
Buying commercial property is one of the best ways to generate wealth.
Commercial property includes office buildings, industrial property, medical centers, retail stores, hotels, hostels, schools, warehouses, etc.
If you are planning to find commercial property in Mississippi for your business, then the expert team of Abide Real Estate Services will be there to guide you every step of the way so that you can fulfill your real estate investment dream with proper planning and research.
Shakeno Dontaye Collins is known for his approachability, compassion, and exceptional work ethic.
Shakeno D Collins Property Experts will assist you to make the right decisions by combining all kinds of information and market knowledge that comes from experience.
He has a wide range of Residential and Commercial property.
He continuously differentiates himself through transparency, quality services, a code of ethics, and the ability to understand the requirement of customers.
Shakeno Dontaye Collins understands the needs/requirement of the client and then delivers the best possible solutions accordingly so that clients can make the best decision.
