Capital gains tax on the sale of real estate.
April 22, 2012 | 50,00 EUR | answered by Andreas Schupp
Dear Sir or Madam,
In 2008, we purchased an apartment that consists of 1 unit in the land register. 1. Separate apartment 49m2 rented out 2. Attic (tolerance present) 170m2 own
There is one entrance for both apartments, in the hallway there is a door for apartment 1 and for apartment 2. Both apartments are completely renovated and fully equipped (kitchen, bathroom, toilet...)
Now we would like to sell the apartment.
How does the speculation tax work, can it be avoided or is there another solution?
Best regards
Dear questioner,
Thank you for your inquiry, which I would like to answer taking into account your input and the rules of this platform.
Please note that my explanations are based on the facts presented by you, and that any modifications or ambiguities in the information provided can affect the tax correct result.
Please note that for professional reasons I cannot address legal questions.
If you sell a property within 10 years of purchase, this sale is generally subject to the so-called speculation tax.
An exception to the provision of § 22 No. 2 in conjunction with § 23 paragraph 1 No. 1 EStG only applies if the property in question has been used for own residential purposes in the year of sale and in the two previous years.
Own residential use also applies if the property has been transferred to a child free of charge.
A child in this sense is only to be understood as one for whom the entitlement to child benefit still exists (i.e. under 18 years or over 18 - 25 years if in school or vocational training).
Transferring the property free of charge to others (even those entitled to maintenance) does not constitute own residential use.
The time period of the year of sale and the two previous calendar years must be a continuous period. However, this period does not have to cover full calendar years.
Example:
A buys a condominium in 1995 which he rents out. From December 1998, A uses the condominium for his own use until its sale in January 2000.
Therefore, A has used the condominium for own residential purposes in the year of sale (January 2000) and in the two previous calendar years (December 1998 and the entire year of 1999).
The sale is therefore not detrimental for A (according to the Federal Ministry of Finance in a letter dated 05.10.2000).
Unfortunately, no further exceptions are provided other than the ones mentioned above.
Therefore, the only choice is to sell the property now or to use it for own purposes first.
I hope that my explanations have been helpful to you.
If you have any further questions, you are welcome to contact me, even within the framework of a mandate.
Best regards,
Andreas Schupp
Tax advisor
02603 - 931906
schupp.andreas@t-online.de
