The purchase and sale of real estate in the country lead to tax obligations related to declaration, payment of taxes, deregistration from the tax service after sale, etc. Questions arise not only for domestic individuals, but also for foreign ones.
When buying real estate, a tax is also payable for its acquisition, in an amount determined by the local administration, according to the location of the property. Here the rules for local taxes and fees apply.
Questions that often arise are what the tax consequences are, and whether tax is due on the income from the sale of real estate, regardless of whether the person is local or foreign.
The answers for individuals are in the Law for Taxes on the Incomes of Physical Persons.
If it concerns 1 real estate property that is residential and 3 years have passed since its acquisition, then the income from its sale is tax-free. For up to two immovable properties, the law requires a 5-year period so that the income from their sale shall not be taxed. For agricultural and forest properties, regardless of their number, 5 years should also have passed.
However, the special hypothesis of real estate acquired by inheritance and will should be taken into account - the income from the sale of such property is also tax-free. And in this line of thought, it should be mentioned that donated immovable properties are excluded from this rule, and their realised sale will be subject to taxation.
Apart from the exceptions, in other cases income from the sale of real estate is subject to declaration and taxation. This happens with the submission of the Annual tax declaration and payment of the amount of the calculated tax due, by 30 April of the year following the year of sale. There is a special calculation mechanism that should be followed.
In cases of Spousal Property Community, each of the spouses should file an Annual tax declaration for their taxable income.
This article is informative and does not constitute legal advice on a specific case. The information is valid to 31-03-2023.