§ 23 EStG Private sales transactions / Real estate
February 23, 2011 | 30,00 EUR | answered by Dipl.BW/SB Ulrich Stiller
Dear Sir or Madam,
the question concerns the possible tax liability when selling a house.
The situation is as follows: Purchase of a single-family house on 1.2.2011 for 320,000 euros including notary and property transfer tax. Renovation with a total cost of 50,000 in the following weeks. Renovation necessary because the house technology was partially from 1955. Move-in (=private use / living) in April 2011. It might be necessary to sell the house again in March 2012. Assumed selling price: 400,000 euros. The house is used exclusively for private, own residential purposes during the entire period.
Question: Is the difference of 80,000 fully subject to speculative tax or can the renovation costs be deducted from it? Or is there no tax at all, because the first part of the sentence 3 applies "exclusively for own residential purposes between acquisition or completion and sale"? Or would it only be tax-free after two years.
Best regards
Dear inquirer,
Thank you for your inquiry, which I would like to answer based on the information you provided and in the context of your commitment within a preliminary consultation as follows:
The sale in March 2012 will be tax-free, as there is no private sales transaction within the meaning of § 23 EStG.
According to § 23 para. 1 No. 1 sentence 3 first half sentence, properties that are used EXCLUSIVELY for OWN residential purposes between acquisition/completion and sale are exempt from taxation. According to the BMF letter of 05.10.2000 Rz. 25, vacancy before self-use is harmless if it is related to the intended self-use for residential purposes.
The renovation is directly related to the use of the apartment from April 2011. Since the apartment has been used exclusively for own residential purposes from the beginning until the sale, no capital gain arises according to § 23 para. 1 No. 1 sentence 3 first half sentence.
I hope that my explanations were helpful to you.
Best regards,
Ulrich Stiller
Tax advisor/Diplom-Betriebswirt
