Changing Real Estate Sales Tax Regulations
July 27th, 2017
Tax regulations on the use of income from real estate sales for private individuals are about to change – according to the information on the website of the tax authority.
The statement details that the income from real estate sales for private individuals (transfer of real estate and property rights) need to be determined starting from the income, the expenses and the holding period.
According to the provisions currently in force in the Personal Income Tax Act, if someone uses their income, or part of their income from a property sale within the declaration period– and declares it in their tax return form– to buy back or acquire without a resale right an insured place for themselves, for a close relative, or life partner in a home for the elderly, in a home for disabled persons or at a similar institution, the established and declared tax (or the amount of income used) does not have to be payed.
If the purposeful use of the income takes place following the declaration of tax, in the two years following the sale, in the form of tax equalization according to the existing provisions, the paid tax can be reclaimed. Following this year’s modification, however, after July 20, the paid tax can be reclaimed with the proof of the use of the income. Moreover, based on the temporary provisions, it can be used for the tax liability starting from January 1, 2017. Therefore, the complicated system of tax equalization will cease to exist, and the paid tax can be reclaimed during the year.
Sources: portfolio.hu, adozona.hu