Receiving an inheritance is a delicate process. However, shares should be divided as soon as possible to avoid future problems.
First of all, you have to make an important decision: whether or not to accept the inheritance. In order to make a rational decision, you should bear in mind that:
If the inheritance has more debts than assets, you have two options: either accept the inheritance and take on the debts as well, or refuse the inheritance and be free of any burden.
- Once the death has been notified to the tax office within three months, it is important to file a habilitation of heirs, where the heirs and their rights will be identified, as well as who inherits what. At this point, the head of the couple will be appointed who will be responsible for the habilitation of heirs.
Selling an inherited property: capital gains and taxes.
In order to sell an inherited house, several mandatory factors must be taken into account, namely the calculation of the property´s capital gains and the declaration of the sale of the inherited property in the IRS.
How do I know the value of the capital gains?
When you sell a property, you have to pay taxes on the capital gains. Capital gains are considered when the difference is positive, i.e. when there is a profit.
To calculate the value of capital gains on inherited property, the purchase price is replaced by the property´s taxable value (VPT) for the year in which it was inherited.
Capital gains = sale price - (VPT x currency devaluation coefficient) - costs of the purchase and sale process - property costs
If you have sold a property for less than the Taxable Asset Value (VPT), you must inform the tax office to avoid paying more tax than you should.
To do this, you need to send a request to the Director of Finance, justifying the value of the sale. This communication must be made by January of the year following the sale or, alternatively, within 30 days of the date on which the property´s valuation became final.
Declaring the sale of inherited property in the IRS.
Another aspect you should consider when selling an inherited property is that you have to declare it in the IRS. Capital gains are normally always taxed at 50% of their value, which is added to the rest of the income to calculate the IRS rate payable.
Inherited property: what to do if it´s rented?
If the house has a tenant, the right of first refusal applies, i.e. the tenants have first refusal to buy the house. On the other hand, if the landlord with whom the lease was signed dies and the house is inherited by another family member, the lease remains in force.
Source: https://www.idealista.pt