Taxes: sale of real estate

Individuals belonging to the ordinary regime will obtain a gross income from the sale of their real estate, which must be reported at the end of the year in the income tax return, if the total income of the year exceeds the amount corresponding to 1,400 UVT.

Next, we will answer the following question: If a person sells a house, but uses the resources to buy another one immediately, does he/she still have to answer for the payment of some kind of tax?

Taking into account that one of the requirements for individuals belonging to the ordinary regime to be obliged to file income tax returns is that at the end of the year their gross income exceeds 1,400 UVT, it must be understood that those who sell their real estate must calculate the income tax on the profit generated by the sale of the same, whether it is ordinary income or occasional gain (depending on the time during which the asset was owned). However, if the taxpayer decides to change to the simple regime, regardless of the amount of its income, it will be obliged to declare in the special form for such regime, applying the special rates contained in article 908 of the Tax Statute -ET-, modified by article 66 of Law 1943 of 2018.

It should be noted that in the simple regime the occasional gains will have the same treatment as the ordinary regime, for which the disposed asset must have been owned for more than two years.

Additionally, it must be taken into account that, as from January 1, 2019, when the public deed is executed, it must be declared under oath that the price included therein is real and has not been subject to private agreements in which a different value is indicated. If such declaration is not made, the income tax, occasional gain tax, notary and registration fees will be calculated on four times the value recorded in the public deed.

On the other hand, Article 311-1 of the ET states that the first 7,500 UVT of the profit generated in the sale of the house or apartment of a natural person will be considered exempt, provided that the total amount of the money received in the sale thereof is deposited in a savings account for the promotion of construction -AFC-, and is destined to the acquisition of another real estate property, or for the total or partial payment of one or more mortgage loans related to the house sold. For the latter case, the deposit in an AFC account is not required, as long as the direct credit to such credit is verified.

Let us remember that, as of 2019, in the sale of real estate, property or used, exceeding 26,800 UVT ($918,436,000), 2% corresponding to the new INC consumption tax on real estate will be applied, in accordance with the provisions of article 512-22 of the ET, added by article 21 of Law 1943 of 2018.

Source: Actualize