How to reduce capital gains when selling a home: 4 ways

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Along with personal income tax and IBI, municipal capital gains is the third tax paid when selling a home . It taxes the increase in the value of the land compared to the time of purchase, and is collected by the town councils. Do you want to know how to reduce the capital gain when selling a home ? Below we show you up to four ways to do it.  

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1. Choose carefully the way to calculate the Colombia Email List capital gain when selling your home
The municipal capital gain is a tax that is paid by self-assessment , and you yourself can choose the way to calculate it. Because yes, there is not only one way, but two: the objective mechanism and the real mechanism . These are the formulas to calculate the tax base according to each one:

Objective mechanism :
Cadastral value of the land x City Council coefficient

Actual mechanism :
(Transmission value – acquisition value) x percentage of the cadastral value of the land

In both cases, the result is multiplied by 30% , which is the maximum tax rate. What you get will be what you pay in capital gains.
Use each method and see which one gives you the lowest result. This is one of the best tips to pay less when selling a house , and one of the easiest to apply. To learn more about municipal capital gains and the ways to calculate it, we leave you an article below.


Recommended reading:   What is municipal capital gains and how to calculate it?
2. Check the cadastral value of your home
As you have seen, the cadastral value is an important figure when calculating the capital gain from the sale of an apartment , especially if the objective mechanism is used. The lower the cadastral value, the less you will pay in capital gains.



Its amount does not depend on you, since it is a value established by the cadastre based on parameters that you cannot modify. You can, however, request a review in the hope that the value is somewhat inflated and can be corrected. An online appraisal simulator could help you compare.

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3. Reduce the acquisition value to reduce capital gains
For the actual mechanism, the subtraction of the transmission value from the acquisition value is essential. With this method, therefore, there are two answers to the question of how to reduce municipal capital gains expenses : increase the acquisition value or reduce the transfer value.