Buyer of “new construction” – complete the return and pay the transfer tax
You purchase “newly constructed property”, as defined by tax rules, if you buy a new home, parking space, storage room or similar from a builder-developer during the construction stage. Then you are actually buying shares in a housing company or real estate company, and these shares entitle you to the possession of a flat or apartment in a block of flats, or of a terrace-house apartment.
File the return
File a transfer tax return in 2 months from the date when ownership was transferred to you. Do this even if a realtor assisted you when you bought the property.
- If you buy together with a co-buyer – typically your spouse – both of you must submit a transfer tax return.
- To complete the return, you should have the purchase and sale agreement or other contract on hand.
- However, you generally do not have to add very many enclosures. In MyTax, a window will appear that tells you whether an additional enclosure must be attached or whether it is enough if you just complete the tax return.
The paper-printed form can be used by individual taxpayers, general partnerships and limited partnerships. If the paper form is filed, you must enclose a photocopy of the purchase and sale agreement, of the builder-developer’s letter addressed to buyers, or a photocopy of the receipt proving that you have paid the final instalment.
Pay the tax
Pay the tax in 2 months from the date when ownership was transferred to you. Do this even if a realtor assisted you when you bought the property.
- If you use MyTax to send the payment, reference numbers and other bank details are automatically transferred to the template for processing by your e-banking service. MyTax calculates the amount of transfer tax.
- If you pay via your personal e-bank instead, you need the bank account number for the Tax Administration and the bank reference number for transfer tax. To get the bank account and reference numbers, you can:
- Look them up in MyTax: Checking the bank account and the transfer tax reference number
- Call the service telephone number +35829 497 026 (Payment transactions, limited service available in English, standard call rates)
The amount of tax to pay must have 2 decimal points. After you have made the necessary calculations to arrive at the right tax, round it out to the nearest cent as usual. Example: your calculation result is €345.67890. You must round out the result in order to pay €345,68 as your tax.
If there is more than one buyer – two spouses, for example – each must pay their own share of the transfer tax on a separate bank transfer and enter their personal reference numbers. The amount will be displayed as a paid tax in MyTax on the following business day or the day after that.
You receive a certificate of transfer tax
You will receive a certificate on filed and paid transfer tax in MyTax or by post. Normally, after you have filed and paid, the certificate will appear in MyTax in 2 days. Finding the certificate in MyTax.
If you file your return on paper, wait for the certificate of transfer tax to become available in MyTax a little later.
If you buy shares in a housing company that has its information recorded in the new residential property information system, your transfer tax payment is recorded automatically in the database. You do not have to present any certificate to the manager. You can ask the manager whether the housing company’s information is in the new system.
If the list of shares and shareholders is not recorded in the new system, show the building manager your certificate to prove that you have paid the transfer tax. Taxpayers who have submitted the transfer tax return form before 1 November 2019 receive a stamped copy of the submitted return from the Tax Administration, and they can use it as their certificate. Ask the manager about any other documentation they might require for having your name entered in the list of shareholders.
If you re-sell the apartment before the building is completed
If an item of new property is sold when it is still under construction and before its ownership is transferred to you, such a sale goes ahead under a “contract on assignment”.
- If you receive “new” property by virtue of assignment, see this guidance
- If you are the reseller, see this guidance
Amount of transfer tax – newly constructed property
Transfer tax is 2% of the price (including any other consideration that had been agreed) and the unpaid part of any housing-company loan.
The “debt-free price” (velaton hinta; bostadens skuldfria pris) contains both the price of the flat itself and the part representing the housing-company loan, if any. It is not important whether you pay up the specific part of the housing-company loan when you sign the contract or whether you pay it in small instalments every month.
Example: Sarah buys a flat for €120,000 (this is the price advertised as “myyntihinta”). There is a loan balance of €160,000 allocated by the housing company to Sarah’s flat. This means that the debt-free price equals €280,000. The €280,000 is the base for transfer tax. The tax is 2% × €280,000 = €5,600. It makes no difference whether Sarah pays off her part of the company loan when buying the flat, or gradually as part of the monthly charge.