What are real estate capital gains?

When we talk about real estate capital gains we always refer to the profitability obtained from the sale of a property. If, for example, you bought a property for 100,000 euros and sold it for 150,000 euros, you realized a capital gain of 50,000 euros... Well, sort of.

It is that to make the calculation of the capital gains of real estate it is always necessary to apply the coefficient of monetary devaluation (or monetary correction). This coefficient takes into account the inflation index and its function is to update the acquisition value of a property, "bringing" it to the present day. This is because the value of money is not always the same and 1,000 euros spent today is not the same as 1,000 euros spent in 2010. The table of the monetary coefficient can be found here.

In addition to this coefficient, this calculation is also made taking into account all the deductible expenses with the purchase and sale of the property (commissions paid to the real estate agent, costs with the deed or registrations) and with the charges with the valuation of the same (restoration works, for example).

Thus, when we subtract all these variables from the sale value, we obtain the real estate surplus value. The calculation is as follows:

Capital gains = sale value of the property – (acquisition value of the property x monetary coefficient) – charges with purchase and sale –   charges incurred with appreciation of the property  in the last 12 years.

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