Are you thinking of selling a property or a building plot? Make sure you do it at the right time to avoid losing money. Certain taxes apply when you sell on, but they can be reduced or even disappear altogether depending on the timing.
BIV immobilier, your go-to estate agency in Liège, helps you see things more clearly.
What is property capital gains tax and how is it calculated?
It is a tax that applies only to the profit on the property sale and not to the full sale price. Note that to calculate the profit, it is not enough simply to subtract the purchase price from the sale price. Several elements must be taken into account:
- Purchase price = the price at which you acquired the property + registration costs, notary’s fees, renovation costs, etc. Generally, a flat-rate increase of 25% is applied, plus 5% per year.
- Sale price = the price at which you sold the property – notary’s fees and agency fees where applicable.
Example calculation
You bought a property for €250,000 2 years ago (date of the notarial deed). The purchase price becomes:
→ €250,000 + 25% of €250,000 (i.e. €62,500) + 2 x 5% of €250,000 (i.e. €25,000).
If you sell the property for €350,000, the taxable capital gain will be: €350,000 – €250,000 – €62,500 – €25,000 = €12,500.
The percentages applied depending on the situation
The property is your main residence
This is probably the simplest scenario, since no tax applies to the capital gain. µ
The property is not your own home
- Sale within 5 years of acquisition: 16.5%.
- Sale after 5 years: no tax.
Building plots
- Sale within 5 years of acquisition: 33%.
- Sale between 5 and 8 years after purchase: 16.5%.
- Sale 8 years or more after purchase: no tax.
Inherited properties
Capital gains tax does not apply, regardless of how long the property has been held.
Properties received as a gift
Where the donor had held the property for less than 5 years, or less than 8 years for a plot of land, AND you sell the property within 3 years of the gift: the tax is 16.5% for a dwelling, and 33% or 16.5% for a plot of land. In all other cases, no tax applies.
In conclusion
To maximise your profits, and if the situation allows, start the sale process after the periods mentioned above in order to limit or eliminate property capital gains tax. In Liège, the BIV immobilier agency
supports you in selling your property. Would you like to work with us? Contact us today.
Also read: Can you sell a property with an outstanding loan?
