Capital gains is a term that is closely linked to the world of investment and on which it depends that you have to pay more or less money in the next income statement. But what leads you to forget that it also applies to other material goods, such as floors, land or even jewelry. Because in effect, capital gains are basically the increase in the value of a thing, especially a property, due to circumstances that are extrinsic and independent of any improvement made on it.
If something that characterizes capital gains is due to its effect tax. Because any profit you make will have to be treated by a series of taxes that are in force in Spain. Some of the most relevant are the Income Tax for Individuals (IRPF), cadastral value and to a certain extent also the Property and Real Estate Tax, better known as IBI. This is the least desirable aspect of goodwill. That you will have to account for the operations that have generated a profit at any time.
However, it is very convenient to separate which goods it affects to show what its real value is and what kind of applications this generates. capital increase. Because not in all cases it will be the same. A capital gain in the equity markets has nothing to do with that developed through your real estate. They only have in common that in all cases there is a return on the price of money and that it can be more or less intense, depending on different variables.
Capital gain on stock investment
It is the most frequent among Spanish users and refers to the money you earn in a stock exchange or other similar markets. That is, the difference between the purchase price and sale price. This is the amount that is considered goodwill. If you have invested 10.000 euros and in the end the sale produces 20.000 euros, the capital gain will be 10.000 euros than the mathematical operation of this accounting movement. In any case, it is something that all investors, as in your own case, want to aspire to. Because if it were not like that, it would be the sign that you have lost money in the operations carried out.
In any case, the capital gain on the investment is not free. Of course not, since it will be taxed by a series of taxes that will make you minimize the profits achieved. The main tax for the private investor is the Personal Income Tax (IRPF) on the capital gains obtained. Although the sale of shares is not subject to withholding, it is necessary to include the operations carried out in the Income Statement, with the consequent payment of the corresponding income tax for the capital gains obtained. Do you want to know what is the cost of capital gains through this common rate?
Withholdings of up to 23%
It is convenient for you to know the tax rates in force in Spain for this kind of monetary operations. As well, vary from 19% to 23%, based on the profits you have generated in each of the operations in the financial markets.
- With earnings up to 6.000 euros it will be 19%.
- With earnings between 6.000 and 50.000 euros it will be 21%.
- All earnings over 50.000 euros will be taxed at the maximum, at 23
In any case, capital gains are not only generated by operations in financial markets. If not, on the contrary, it also comes from the payment for dividends. Because in fact, in this specific case, a withholding rate of between 19% and 23% is applied, always based on the amount collected through this accounting concept.
Capital gains for other concepts
In another vein, capital gains can also be due to real estate operations. To the point that it is one of the most frequent cases among users. In particular, sell a property with gains with respect to its original price, that is, the purchase price. In this scenario, the capital gains of a real estate property can have various connotations, as you will be able to verify from now on. Because it will also generate expenses that will be reflected through certain taxes or municipal fees.
When talking about what capital gains are, it is necessary to refer to the so-called Capital Tax. Value of Urban Lands. Because it is after all the municipal capital gains. In any case, it is a local rate that you must formalize when you carry out an asset transfer operation. Now, if you are the owner of a rustic property, you will be completely exempt from this payment since it only affects urban properties. Among which the flats, garages or even commercial premises stand out.
Municipal capital gains tax
In any case, you cannot forget at any time what the municipal capital gain is. In the sense of what it is and when it is paid. Well, it is the rate on the increase in the value of urban land. All municipalities apply them to neighbors who have a property of these characteristics. But with a small precision, and that is that this movement is formalized at the precise moment of selling or donating a property. So that it will never come out for free, but you will have to answer for the increase in its value and proportionally to its actual amount.
In another order of things, you need to know that when a property or real estate is transferred, it is only the selling party who will have to pay this local tax. Fortunately for you, if you are from the buying party, you will not have to assume any kind of expenses. In any case, it is a tribute that you must fill in at the town hall itself where the home, apartment or business premises that are the object of the operation are located. To the point that this economic transaction can tax to levels that can affect your family or personal budget.
How do you calculate this tax?
However, one of the biggest headaches of that tax on housing comes that it is very difficult to calculate. Not all users have easy to perform this mathematical operation. To help you in this task, nothing better than knowing that the tax base is calculated based on the cadastral value of the property and the time elapsed in the possession of the seller or the donor or deceased, in the specific case of donations and inheritances. So that you are more clear about what you will have to pay from now on for this kind of operations, you will have to find out what the coefficient that will be applied to you from this moment.
These are the maximum limits on the coefficient of increase to be applied by the council in each case. And what you have to pay will depend on what you have to pay through this tax directly linked to capital gains. As you will see, the coefficient decreases as the years go by.
- From one to five years: 3,7.
- Up to 10 years: 3,5.
- Up to 15 years: 3,2.
- Period of up to 20 years: 3
Synonym of wealth
In all cases, and whatever the operation you have carried out, when you have capital gains it is a very clear signal about the fact that you have increased your personal wealth. Although as this difference is greater, it will be penalized by several taxes. It is something you should have to plan your personal accounts. That is, not all the money you earn will go to your pocket. If not, on the contrary, a part of it will be allocated to administrative expenses and taxes of various kinds and nature.
In any case, it will be a sign of wealth and that you have enough capital to invest it. Not only in operations in the equity markets. But also in real estate or even from alternative investments. Capital gains will not be indifferent to anyone, as experience will have shown you in recent years. Not surprisingly, it is a very plural concept that affects many things in life.
Some of the disadvantages of the concept
Of course, to summarize this hot topic these days is that the capital gain generates a tax that is levied on this increase in value. Do not forget it from now on, because you may have some other problem from which you can be harmed in your interests. In any case, the first conceptualizations of this term so broad and found in the works of the greatest thinkers of humanity. With works in which this hot topic is dealt with in a very specific way.
It is the increase in value of a good or a product for various reasons that the owners cannot control. This is one of the reasons why capital gains have many derivations. Depending on the cause of this enrichment of people. A purpose that many of the people in today's society seek. So that in this way, they can gradually increase their wealth.