Can I avoid double taxation when selling real estate?
June 2, 2024 | 120,00 EUR | answered by Isabel Zimmermann
Dear tax advisor,
I have a question regarding the taxation of the sale of properties. I own several properties and am planning to sell one of them. Now I am concerned about a possible double taxation and wondering if there are ways to avoid it.
The current situation is as follows: I purchased the property several years ago and have been renting it out. Now I want to sell it to make a profit. However, I am unsure about the tax implications of the sale.
The current state is as follows: I bought the property at a certain price and plan to sell it at a higher price. This will result in capital gains that I will have to pay taxes on. However, I have heard that there could also be a possibility of double taxation when selling the property.
My concerns are that I do not know exactly how the double taxation works and if there are ways to avoid it. I do not want to pay more taxes than necessary.
Therefore, my question to you is: Can I avoid double taxation when selling properties? Are there specific regulations or actions I can take to minimize the tax burden? I would greatly appreciate your help and advice on this matter.
Thank you in advance.
Sincerely,
Erwin Mellert
Dear Mr. Mellert,
Thank you for your question regarding the taxation of real estate sales and the potential double taxation. I understand your concerns about how the sale of your property will impact your taxes and whether there are ways to avoid double taxation.
Firstly, I would like to explain what is meant by double taxation. This occurs when the same income transaction is taxed multiple times, for example, at the income tax and capital gains tax levels. In your case, this means that the gains from the sale of your property may be subject to both income tax and potential speculation tax.
To avoid double taxation, there are various options that can be applied depending on your individual situation. One option is choosing the right timing for the sale. If you have owned the property for more than 10 years, the gains from the sale are tax-free. If the property has been held for less than this period, you may be able to bypass the 10-year speculation period by using the property for your own use or renting it out.
Additionally, you can offset losses from other capital investments with the gains from the sale to minimize the tax burden. You may also be able to claim allowances or tax deductions to reduce your tax liability.
It is advisable to consult a tax advisor who can provide you with individual and professional advice on optimizing your taxes when selling your property. A tax expert can analyze your specific situation and provide tailored solutions to avoid double taxation and minimize your tax burden.
I hope this information is helpful and answers your question. If you need further assistance or require more detailed information, I am happy to help.
Best regards,
Isabel Zimmermann
