House sale, which I only transferred ownership of a year ago. Taxes?
January 28, 2012 | 50,00 EUR | answered by Andreas Schupp
Hello.
About a year ago, I inherited a house from my parents. They owned the house for about 40 years. The notarial contract stipulated that I must continue to pay rent to my parents. The rent payment for the other residential unit in the house also goes to my parents. The land register contains a note stating that I cannot sell the house without the consent of my parents. The value of the house was stated as €100,000.
Generally, if you sell a house within 10 years of acquiring it, you have to pay taxes on the profit; does this apply here as well?
Or is this an early inheritance, making the sale tax-free?
Could there be issues with the tax office because the value of the house was stated as €100,000 during the transfer, but it is now being sold for €175,000? Would I have to pay taxes on the €75,000 "profit"?
Please provide detailed explanations.
Please enlarge the attachment for better viewing.
Thank you in advance.
Best regards.
Dear inquirer,
Thank you for your inquiry, which I am happy to answer taking into account your input and the rules of this platform.
Please note that my explanations are based on the facts you have presented, and that adding, omitting, changing life circumstances, or the ambiguity of the information provided can affect the correct tax result.
Please be aware that for professional reasons, I cannot address legal questions.
Unfortunately, the attachment cannot be opened, so I will answer your question as follows without taking into consideration the information in this attachment:
The sale of a property (object) is subject to income tax according to § 22 No. 3 in conjunction with § 23 Paragraph 1 No. 1 EStG if less than 10 years have passed between the purchase and sale of the object.
This does not apply if the object has been used for personal residential purposes within the last 3 years before the sale or has been used for personal residential purposes between acquisition and sale. In these cases, the sale is tax-free within the 10-year period.
In your case, it appears to be an anticipated inheritance arrangement, where you have also received the object free of charge, so the exception rule of § 23 Paragraph 1 Sentence 3 EStG should be considered.
According to this, the holding period of the predecessor (parents) must be included in the calculation of the 10-year period.
Therefore, if the parents agree, you can sell the object tax-free within one year, because together with your parents, you have held it for more than 10 years.
I hope that my explanations have been helpful to you.
If there are still any uncertainties, please use the option to ask further questions.
Kind regards,
Andreas Schupp
TAX ADVISOR
