Selling a property and capital gains tax

Have you just inherited a house and are thinking of selling it? Or do you want to sell your flat? But you are worried about capital gains tax. Remember that selling a house or flat does not have to involve a high tax cost. Some legal provisions may release you from the obligation to pay the tax. So read the article below and find out in which situations you may be exempt from this liability.

Selling a property after 5 years

If you want to sell a flat, you may be able to avoid paying capital gains tax. Time is extremely important here, namely 5 tax years. If you bought a flat in 2013, you can sell it without capital gains tax after the following years have passed: 2014, 2015, 2016, 2017 and 2018. So from 1 January 2019 you can sell the flat and rely on the expiry of the so-called 5 full tax years. Remember that tax years are not the same as years counted from the date of purchase. This rule applies to sales of private (non-business) assets.

When we cannot wait

The situation changes dramatically if you want to sell a flat before five tax years have passed. In that case the owner of the flat is obliged to pay income tax at 19%. Here the income is the revenue from the sale of the flat, reduced by the cost incurred when purchasing the property. Remember that the income you receive from selling the flat must be declared in your tax return on the PIT-39 form.

Interest relief and spending on a new property

Unfortunately, under the law you cannot use two tax exemptions at the same time for one property. If you have deducted from your income the interest on a loan taken out to buy the property, you unfortunately cannot claim the relief available for new housing expenses.

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Capital gains tax and inheritance

If you inherit a property upon the death of someone close to you, then under the law the flat is acquired on the day of death. So the date on which the court's decision on the acquisition of the inheritance becomes final, or the date of the notarial certificate of inheritance, does not matter. It is worth bearing in mind the position of the Tax Office, which, where an heir inherits more than their share in the estate (with co-ownership between the heirs being dissolved at the same time), treats the acquisition of the property as the result of the ruling in question becoming final.

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