I’m going to sell my apartment. I am registered elsewhere and this is not my only property, so I will have to pay capital gains tax.
But I invested money in this apartment: I ordered kitchen equipment, made custom furniture for the rooms, replaced doors, and so on. All this happened more than 10 years ago, and no supporting documents have been preserved. Can I support these investments, for example with photographs of furniture? Or maybe furniture and doors can be sold as movable property (under a separate agreement from the apartment sale agreement) so that the income from their sale is not taxed? Asks Gatis I.
Tax consultants of the State Revenue Service (VID) confirm: when selling real estate, it is necessary to pay personal income tax in the amount of 20% of capital gains, unless the law provides for tax exemption.
Income from the sale of real estate is calculated as the difference between the sale price of the property and its original cost, as well as the value of investments made while owning the property.
Investments in real estate must be supported by documents confirming payment, such as receipts, checks, payment documents, account statements from a credit institution or online banking payment orders.
When determining the purchase price of real estate, other types of evidence, such as photographs of furniture, are not taken into account.
Can furniture be sold separately?
Answering the question about whether it is possible to sell furniture and doors as movable property under a separate agreement, VID reports that it does not provide advice on concluding civil transactions. Tax regulations do not establish or limit the terms of such agreements.
Accordingly, there is no prohibition on drawing up a separate contract for the sale and purchase of kitchen equipment or other furniture.
When selling property purchased for personal use, there is no need to pay tax if it is not related to the seller’s business activities.
The Personal Income Tax Law states that income from the sale of movable property owned by an individual and intended for personal use, such as furniture, clothing and other items, is not included in taxable income, with the exception of income from the sale of things manufactured or purchased specifically for sale.
Please note!
Tax-free income, if its total amount exceeds 10,000 euros per year, must be declared.
Source: www.gorod.lv
