The new rules for benefiting from the IRS exemption on capital gains from the sale of houses came into force last Wednesday, September 11th. With this new legislation, it is now possible to buy and sell your own permanent home within a period of one year instead of two, for example.
However, this decree-law was published without retroactive effects, which means that in 2024 there will be a dual regime for applying the capital gains exemption (the new and the old).
Decree-Law No. 57/2024 has already been published in the Official Gazette, putting into effect the new rules on the exemption from capital gains on the purchase and sale of houses, which will facilitate the geographical mobility of families. This legislation came into force on September 11th, but does not have retroactive effects, which in practice means that there are two regimes in force this year for applying this tax exemption.
Thus, the regimes (old or new) apply depending on the date of sale of the house:
Until September 10, 2024: in these transactions, the old regime applies, in which the minimum period between the sale of the permanent home and the purchase of a new house for the same purpose is 24 months. Families can only benefit from the IRS exemption on capital gains from the sale of the house if they have not done so in the previous three years;
From September 11, 2024 (inclusive): from this date, the new tax regime of the IRS exemption on capital gains applies. Thus, the period between the purchase and sale of the house (for permanent home ownership) becomes 12 months. And the family does not have to worry about whether or not they have already benefited from the capital gains, because they can use this regime more than once.
Therefore, the date of sale of the house ends up setting the applicable legal framework, which will have an impact on the IRS declaration for the next year. Anyone who sells their home before September 10th will have to have lived in it for two years, otherwise they will not be able to benefit from the scheme. However, anyone who sold their home on or after September 11th will only have to have lived in the property for one year to avoid paying IRS on real estate capital gains.
Read the full article here!
Source: Idealista
Comments