How can I sell my property in a tax-optimized way?
August 21, 2023 | 50,00 EUR | answered by Tatiana Seiler
Dear tax advisor,
I am facing the decision to sell my property and would like to do so in a tax-optimized manner. The property has been in my possession for 10 years and has been rented out during this time. Now, for personal reasons, I would like to part with the property and want to make the sale proceeds as tax-efficient as possible.
I am currently unsure about which tax aspects I need to consider when selling my property. What taxes are due upon the sale and how can I minimize them? Are there ways to utilize tax allowances or depreciations to reduce the tax burden? What are the tax consequences of selling a rented property compared to a self-occupied property?
My concern is that I could incur high tax payments or financial losses due to tax errors when selling the property. Therefore, I am looking for comprehensive tax advice to optimize the sale of my property and improve my tax situation.
Can you recommend specific measures to optimize the sale of my property from a tax perspective? What steps should I take before the sale to take advantage of tax benefits? Are there specific deadlines or regulations that I need to adhere to in order to avoid tax pitfalls?
Thank you in advance for your support and expertise.
Sincerely,
Fred Krause
Dear Mr. Krause,
Thank you for your inquiry regarding the tax-optimized sale of your property. As a tax advisor with expertise in real estate taxation, I can assist you and recommend specific measures to optimize the tax implications of your sale.
When selling a property, various tax aspects need to be considered. Typically, a capital gains tax, known as speculation tax, applies when you have owned the property for less than 10 years. However, since you have owned the property for 10 years, this tax does not apply to you. Instead, you will be subject to real estate income tax on the sale profit, which is usually 27.5% and consists of income tax and solidarity surcharge.
To minimize the tax burden, you can utilize various tax allowances and deductions. For example, expenses such as renovation and maintenance costs, real estate agent fees, or notary fees can be deducted from your sale profit, reducing the tax liability. Additionally, you can also make use of tax allowances such as the annual allowance of €9,408 for singles or €18,816 for married couples to further reduce your tax burden.
The tax consequences of selling a rented property differ from that of a self-occupied property. For a rented property, you must repay the depreciation allowances claimed during the rental period upon sale. Additionally, the rental income received must be taxed. On the other hand, with a self-occupied property, you can benefit from the tax-free sale of your primary residence.
To optimize the sale of your property and avoid tax pitfalls, I recommend contacting a tax advisor early on. They can help you consider all tax aspects, take tax-optimized measures, and utilize potential tax benefits. Furthermore, before the sale, carefully review all relevant documents and obtain any missing documents to ensure a smooth sales process.
I hope this information has been helpful to you, and I am available for any further questions. Thank you for your trust, and I wish you success in the tax-optimized sale of your property.
Best regards,
Tatiana Seiler
