23 Income Tax Act (ESTG)
March 28, 2017 | 100,00 EUR | answered by Oliver Burchardt
On 15.07.2012, I acquired the detached house in G. vacant (purchase price 400,000.00 euros). The transfer of benefits and burdens took place on 20.10.2012. From the time of the transfer of benefits and burdens until the summer of 2014, I renovated the property as a DIY enthusiast with a lot of personal effort. From summer onwards, I lived in the property. Starting from May 201 no there is an electricity provider with an annual consumption of 4000 kWh per year and a contract with Telekom (Magenta with telephone, internet, TV). I was still registered in M. On 20.12.2015, I registered and relocated my residence to G. (in the new house) and have been registered there since that time (entry in the ID card). This would also be indicated in the 2015 income tax return - residence in house G. I have never registered a second residence. The property was not rented out during the entire period. In May 2017, I plan to sell the property again. The selling price will be around 800,000 euros. The renovation costs are not verifiable due to personal effort. Taking into account all ancillary costs, a profit of approximately 300,000 euros is expected. The deadline from § 23 EStG would theoretically be met. How should proof of residential use be submitted to the tax office? I have the following documents: electricity bill, Telekom provider, heating oil purchase.
Dear inquirer,
Thank you for your inquiry, which I am happy to answer as part of an initial consultation.
Based on your description, the conditions necessary for a tax-free sale of the property are generally met, as you have been residing in the property in the years 2015, 2016, and 2017.
The use of the property as your primary residence in 2016 and 2017 is confirmed by your registration. There should be no issues with this.
If you have already claimed your commuting expenses from the property to your workplace in your income tax return for the entire year 2015, this should also serve as sufficient proof in my opinion.
Furthermore, I consider the invoices to be adequate if they show that you have had the ability to use the house at any time and have done so to a sufficient extent. You may also have witnesses who can confirm that you have actually been residing in the house since the summer of 2014 and that it was not just a temporary vacation rental.
If you were living in a rented apartment before, it is certainly evidence that you have not made any rental payments since the summer of 2014.
In the end, you need to dispel any potential accusation from the tax office that you were only using the house as a vacation rental.
Please feel free to contact me if you have any further questions.
Best regards,
Oliver Burchardt
