Income tax/Capital gains tax
February 12, 2012 | 30,00 EUR | answered by Dipl.BW/SB Ulrich Stiller
Hello, a very similar question as answered recently regarding profit from the sale of a property, built in 1978.
Purchased in November 2010. Rented to the seller until his death in July 2011. Personal use of the holiday apartment in the basement. After that, personal use of the house, however, the holiday apartment in the basement was rented out for several weeks in 2011.
If a potentially significant profit should arise from an upcoming sale in 2012, does it need to be taxed? Or is it better to wait for the 3-year period of personal use? When exactly does this period end?
Is the profit subject to income tax? Or is there a capital gains tax?
Thank you very much!
Dear (s) advice seeker,
Thank you for your inquiry, which I would like to answer based on your information and in the context of your commitment in a first consultation as follows:
In responding to your inquiry, I assume that the property is part of your private assets and that you have generated rental income from the rented part.
You must first distinguish between
the self-used part of the property and
the rented part of the property.
If you have continuously and exclusively used the self-used part for residential purposes since its acquisition in November 2010, there is no speculative gain for this part. Only for the capital gain attributable to the part that was rented until July 2011 would you have to pay income tax if the property is sold in 2012.
You can avoid taxation as a speculative transaction altogether if you have also used the part that was previously rented for residential purposes in the year of sale and in the two preceding years (§ 23 para. 1 sentence 1 no.1 sentence 3 EStG). In my opinion, continuous use for residential purposes is not required.
For example, if you have completely used the house for residential purposes since August 2011, and continue to do so in 2012, then you can sell the entire house tax-free during the course of 2013.
I hope I was able to assist you.
Sincerely,
Ulrich Stiller
Tax advisor/Diplom Business Administrator
