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Sell a building you’ve inherited: some useful information!

Posted by Bruno Biemans on 12 September 2019

Does the seller who decides to sell the property he has inherited run a tax risk, a risk of which he must be informed by the real estate agent?

Double taxation?

The seller will of course suffer the inheritance tax but will it be taxed again if the property is sold within 5 years of the inheritance?
Fortunately, no.

Indeed, the taxation of the capital gain realized in the event of sale of a building within five years of its purchase can be imposed, but … not for a building which the seller has inherited.

Warning ! If the deceased has made a donation of this building, the capital gain can be imposed in case of sale.

The sale may, however, result in the payment of additional inheritance fees!

It should be remembered that when the declaration of succession is filed, a value is given to the building.

It is on the latter that inheritance taxes are calculated at first, but this valuation is not final!

If the building is sold soon after for a price much higher than the declared value, the seller may be asked for additional inheritance tax and in principle also a fine!

Concrete example: The value of the inherited house fixed at 300 000 € and it is sold a year later for 400 000 €. Inheritance tax has been paid on the € 300,000 of the declaration of succession, but a surcharge may be established after the sale on this € 100,000 difference and a fine.
To avoid a fine once the property has been sold, the seller may make an “additional” declaration of inheritance tax.
Is it possible to avoid any supplement?

The additional inheritance tax can only occur within two years after the filing of the declaration of succession. More risk, therefore, if the house belonging to the inheritance is sold after three years for example …
In order to complete the declaration of succession, the seller may have the property appraised by an expert approved by the tax authorities. This value is then final!

To return to our example, if the expert also evaluates the house to 300 000 €, the seller will have nothing to pay more if the building is sold within two years for 400,000 €.

(source: translated from pim.be)

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