The ideas of Taxable Family Assets and Main Dwelling were two of the novelties added to the Fiscal Code by Law 66 of October 2017 (which was governed by Executive Decree 363 of December 4, 2018).
The real estate that the property owner plans to use permanently for housing purposes with his family, who share a residence, is known as the Taxable Family Asset. According to the Family Code, family is the concept that makes up family assets.
The main residence, on the other hand, is the one that the landowner uses permanently for housing and does not count as family property; the only distinction is that he lives there alone, without family.
Updates related to Taxable Family Heritage
We can emphasize four (4) crucial elements of the Tax Code revisions pertaining to these two new items:
- Properties valued up to $120,000.00 that are completely exempt from property taxes. However, a residential property may qualify for the tax benefit of a taxable Family Asset or Main Dwelling even if its cadastral value exceeds $120,000.00. This is because it only has to pay taxes on the excess cadastral value, as determined by the table in Article 766 of the Tax Code: 00% on the taxable base of zero dollars up to $120,000.00 with 00/100 ($120,000.00).
- 00% on the zero-dollar taxable base up to $120,000.00, or 00/100.
- 50% of the one hundred and twenty thousand dollars with 00/100 ($120,000.00) surplus tax base up to seven hundred thousand dollars ($700,000.00).
- 7% of the $700,000 surplus tax base.
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Lowering the cost of determining a property’s cadastral value, which serves as the basis for tax payments. The range of this reduction is 0.5% to 0.7%.
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Vacation homes are not eligible for this exemption, and purchasing a second property does not count as a Main Dwelling or as a component of the Taxable Family Asset.
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Being classified as Main Housing or Taxable Family Assets can also help properties held in a company’s or foundation’s name. In these situations, there are differences in the requirements to be eligible for the tax benefit.
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