Incentives for Homeownership
The crisis has hampered the sale of housing, but the tax remains an incentive for investment in this asset. However, it is necessary to understand the upcoming changes in deductions and capital gains taxation.
The crisis has hampered the sale of housing, but the tax remains an incentive for investment in this asset. Sellers should know that since January 1, 2010 changes to capital gains taxation on the sale of real estate.
For their part, buyers have to bear in mind that the Government’s intention is to eliminate deductions for primary residence purchases from January 1, 2011 for incomes above EUR 24107.2. They have, therefore, a year to ensure relief to buy a house.
Those who have purchased a home or do so before January 1, 2011 continue to keep the rebate as it applies today. In general, the investment in the acquisition, rehabilitation, construction or expansion of primary residence can deduct 15% of the total contributed a maximum of 9,015 per year, representing a maximum rebate of 1352.28 per year in income tax . This stop includes principal and interest amortized in the case of requesting a mortgage loan.
In case of making a joint income tax return, the deduction base is also 9,015 euros, as the boundaries are established by declaration and not by the declarant. This figure also applies in the case of separated and divorced, they can continue claiming tax relief that was his main residence during their marriage if she continue to live in their children and the other parent.
Among government measures included in the Law of Sustainable Economy emphasizes the reform on the taxation of residence. If finally goes ahead, the financial year 2010 will be the last to buy a house with a right to relief under the current plan. Thus, from January 1, 2011, amended tax deductions for home purchase and eliminated for incomes above EUR 24107.2. Will only have a base of 9,015 deductible for income less than EUR 17700.2. From this amount, the deductions would be reduced linearly until it disappeared in those 24107.2 euros.
In addition, it creates a new deduction of 10% for works in housing-related energy efficiency, water conservation, or accessibility to be made before the end of 2012. The deduction may not exceed $ 3,000 annually.
In any case, you may enjoy the deduction for home purchase to acquire it even before the opening of a housing savings account, whose term was extended in 2008 from four to six years, but only you can increase the savings from this account in the first four years. The annual deductible contribution is a maximum of 9,015 euros per statement.
On the other hand, capital gains realized on the sale of property are exempt from taxation if it is reinvested in the purchase of another residence or in the rehabilitation of it. If not, the capital gain is subject to a levy of 18%. However, as of January 1, 2010, this tax will increase to 21% except for the first 6000 euros of surplus value, which will be taxed at 19%. In this calculation includes the financial gains and ordinary income from capital.
Yield reductions in rents
The owners of a rented flat used as a primary residence may be charged a general reduction of 50% of the net income obtained. The percentage may reach 100% if the tenant is 18 to 35 years and a net income from employment or economic activities than 7381.33 euros, the amount of public income indicator of multiple effects (IPREM).
For their part, tenants can deduct, according to the stretch state, the 10.05% of the sums in rent during the year. Only income below € 12,000 may be deducted based on maximum of 9,015 euros, while the rest should apply the following formula: 9,015 euros – [0.75 x (Taxable – 12,000).
The rental and purchase to be fiscally balanced main residence in 2011 if the Government approves the reform, as it will increase from 12,000 to 17,000 the income threshold to qualify for the deduction for rental housing.
Deductions for home purchase will cost the Treasury this year 4.415 million euros.