Calculating Taxes When Buying or Inheriting a House Has Changed: Here’s How it Will Affect You in 2022

Calculating Taxes When Buying or Inheriting a House Has Changed

The amount you pay in taxes when buying or inheriting a house is due to change as of January 1st, 2022. This new adjustment is pretty big but not one to be scared of. Basically, it’s been estimated that there will be a difference in the ITP if you’ve purchased a property, the Inheritance and Donations Tax, and the Wealth Tax. You just need to be prepared with the knowledge when buying a house, and you’ll be right on track for a seamless purchase.

In a nutshell, this means that if you’re the taxpayer, you won’t be paying taxes due to how much you purchased your house for, but rather for its market value. This value will be calculated due to real estate sales prices. Similarly, the state of the property and materials used will no longer be taken into account.

In terms of Inheritance and Donation Tax and Wealth Tax, this means that the regional Treasury will no longer make an on-site visit to the property to see if you’ve paid the correct value of taxes. Instead, the amount you pay will be a reference value calculated by the Land Registry based on the calculation from prices of real estate transactions. The value will change every year and depend on the municipality your property is in.

The reference values of properties will be published in an ‘Official State Gazette’ within the first 20 days of December. You also have the opportunity to challenge the reference value by requesting the rectification of the self-assessment of the Treasury.

These changes can be a positive adjustment for many, but it is up to you to be informed on what this means for you individually. The best thing to do if you’re considering purchasing a property in 2022 or expect you may be inheriting one, is to keep an eye out on any further changes and be prepared for when it comes to handling your taxes.

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