Bad news for real estate investors!
With the enactment of the new budget law from January 1, 2020, the rate that allowed the PLUSVALENCE from the sale of a property within 5 years of purchase to be subject to a flat tax instead of its own IRPEF rate was increased by six percentage points
About real estate capital gains, I have already talked about it in this article , and just a few months later, I already have to correct my point.
The subsection 695 of Art. 1 of Law 160 of 27/12/2019 (budget law), goes on to amend the 2005 law that had introduced this possibility, increasing the substitute tax from 20 to 26 percent.
reads the text:
In Paragraph 496 of Article 1 of Law No. 266 of December 23, 2005, the words, "by 20 percent," are replaced by the words, "by 26 percent."
the law in question was the budget law at the time, which in turn read:
In the case of sales for consideration of real estate purchased or constructed not more than five years ago, and of land susceptible to building use according to the urban planning instruments in force at the time of the sale, at the time of the sale and at the request of the selling party made to the notary, as an exception to the rules in Article 67, paragraph 1, letter b), of the Consolidated Text of Income Taxes, referred to in Presidential Decree No. 917, as amended, a tax, substituted for income tax, of 12.50 percent is applied on the realized capital gains. Following the request, the notary shall also apply and pay the substitute tax on the capital gain referred to in the preceding sentence, receiving the provision from the transferor. The notary shall also report to the Revenue Agency the data on the transfers referred to in the first period, in accordance with the procedures established by order of the director of the said Agency.
the original text ( already amended in recent years) underwent a further "adjustment" making it go from a 12.5 percent tax to 26 percent in 5 years--a considerable increase I would say!!!
Three simple lines that are going to interfere with many business plans of all those real estate operators who recently bought a property and then resold it at a possible profit. Unfortunately for them, the margin has shrunk even further by 6 percent 🙁
do you want to know how to avoid paying this 26% as well?
then you may be interested in this article
If you have read the entire contents of this page perhaps you are considering selling a house, it may be helpful for you to know what is involved in selling a house before 5 years
