TONYKO - FROM 01.01.2010 THE HOUSING SELLERS OWE A 10% TAX

FROM 01.01.2010 THE HOUSING SELLERS OWE A 10% TAX

08.02.2010

10% TAX UPON THE HOUSINGS’ PRICE
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rnFrom 01.01.2010 the changes in the Personal Income Tax Act, published in issue 95 on 01.12.2009 of the National Newspaper, came into force.
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rnIn the real estate field the main change is in article 13, paragraph 1, point 1, letter “a” of the Personal Income Tax Act which states “Income acquired during the tax year from the sale or exchange of one residential property is not taxed, if between the date of acquisition and the date of sale or the exchange date there have been more than 3 (three) years.”
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rnTill the end of 2009 the income acquired during the tax year from the sale or exchange of one residential property was not taxed, regardless of the date of acquisition of the property.
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rnThe difference is substantial – according to the new order the sold/exchanged residential property should have belonged to the physical person at least 3 years before the deal, so that the income acquired won’t be taxed. Otherwise, the income from the deal will have to be declared because by general procedure it is subject to tax with a 10% tax upon the sale price.
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rnThere are no changes in article 13, paragraph 1, point 1, letter “b” of the Personal Income Tax Act which states that during the tax year the income acquired from the sale or the exchange of up to 2 real estate properties, as well as agricultural and forest properties (regardless of their number) is not taxed, if between the date of acquisition and the sale/exchange date there have been more than 5 years.
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