The owner of 15 flats and a contributor to 'Espejo Público' advocates a tax strategy for accessing housing: buy, live for three years, sell and reinvest without taxation.
Jon Goitia, owner of 15 properties and a regular contributor to the programme 'Espejo Público', has shared a series of tips aimed at young people looking to buy their first home. His main recommendation: do not aim for the perfect home from the start and take advantage of the tax benefits of income tax to progressively improve.
During his intervention, Goitia explained that the key is to understand buying a home as a long-distance race. “The first home doesn’t have to be your dream home. If you live in a house for three years, sell it and reinvest in a better one, you won’t pay taxes. Income tax sets the pace,” he stated.
The real estate investor asserts that this strategy allows one to break free from the paralysis of wanting the perfect house from the outset. “The best way is to buy a house, sell it in three or four years, move to a better one and repeat the process,” he detailed.
Goitia also recommended delaying independence to save money. “If you can extend your time living with your parents and save for three, four, or five years, that gives you a much better starting position,” he pointed out. According to him, those who start renting at a young age face more difficulties in gathering the deposit for a home.
Another of his practical tips is to first go to the bank to understand the financing conditions before starting to visit properties. This way, the buyer knows in advance how much they can spend and avoids frustrations.
Goitia showcased on the programme the first home he bought at 25: a 19th-century communal dwelling of just 23 square metres, with the bathroom integrated into the kitchen. From there, he began acquiring new properties, first to improve his main residence and then to turn real estate investment into his business.
For the owner, taxation is an ally. The law allows one not to pay taxes on capital gains if reinvested in another primary residence within a certain timeframe. This, combined with prior savings and a modest first purchase, can facilitate access to housing for those who currently see it as impossible.
From a practical standpoint, anyone following this strategy must consider the timeframes: live for at least three years in the property for it to be considered primary and reinvest the total amount from the sale in the new purchase. Otherwise, the tax office could demand payment of income tax on the capital gain.
Goitia's advice comes at a time when housing prices continue to rise and young people find it increasingly difficult to take the first step. The option of starting with a small flat and improving over time may be a realistic alternative for those with savings and job stability.
In any case, experts remind us that each situation is unique and it is advisable to seek proper advice before making decisions. Reinvestment in a primary residence has specific requirements that must be adhered to strictly to avoid losing tax exemption.
You may also like
