Inquiry regarding the 3 property limit and speculation period.
March 26, 2022 | 50,00 EUR | answered by Steuerberater Bernd Thomas
Inquiry regarding the 3-property limit and speculation period
My real estate situation is as follows:
I live in a single-family house that I purchased in 1997, which also has a vacation apartment that I have been renting out for 10 years.
In 2008 (notarial purchase agreement dated 19.08.2008), I bought and rented out a condominium which I sold in 2019 (notarial purchase agreement dated 26.04.2019).
In 2009, I bought and rented out 2 condominiums (notarial purchase agreements dated 03.09.2009), one of which I sold in 2022 (notarial purchase agreement dated 01.02.2022).
In 2010 (notarial purchase agreement dated 16.12.2010), I bought and rented out another condominium.
In 2012 (purchase agreement dated 19.01.2012), I bought and rented out another condominium. The first tenant moved in on 01.05.2012, but the apartment has been vacant since 01.02.2022, so it was not rented out for a full 10 years, but I have owned it for longer than 10 years. I now want to sell it.
In 2017 (written purchase agreement with the buyer dated 31.10.2017), I sold a garage on leased land that I owned for more than 10 years, without a notary, as I was not registered in the land register, but I had to pay property tax annually, similar to lease gardens.
My questions:
What can I expect in terms of taxes?
When does the speculation period for the apartment purchased in 2012 expire? Is it detrimental that I did not rent out this apartment for a full 10 years?
Does the sale of the garage also count as a property?
If my new partner and I buy a house, does that also count as a property or only sales?
If I decide to buy and rent out another condominium, does that count as a property or only sales?
My parents are older, and I hope they live for many more years, but if I ever have to sell the inherited house, does that also count as a property in terms of the 3-property limit?
Dear questioner,
I am happy to respond to your inquiry based on the information provided in a preliminary consultation on frag-einen.com. The response is based on the information you provided regarding the situation. Missing or incorrect information can affect the legal outcome.
The speculation period for properties in private ownership is ten years, regardless of how long they were rented out. The period is calculated based on the dates of the contractual transactions (usually the date of the notarial contract). A property must not have been part of a business asset during this time, even partially.
If developed properties in private ownership have been rented out for a long period (at least ten years) until they are sold, the sale of the developed properties also generally falls under private asset management (see Federal Fiscal Court ruling of April 6, 1990 - BStBl II p. 1057). This could be a bit tight for the property from 2012, but the other properties have been rented out for a longer period.
Even if the garage is included, there would only be two properties left for the three-property limit.
It should be noted that the boundaries of the three-property limit are not rigid and must be assessed based on the circumstances of each individual case. In cases of doubt or borderline cases, a binding statement from the tax office (for a fee) can provide legal certainty.
Best regards,
Bernd Thomas
Tax advisor
Information according to DL-InfoV: Tax advisor Dipl.-Kaufmann (FH) Bernd Thomas, Tax Advisor, Franklinstraße 15, 30177 Hannover, Member of the Chamber of Tax Advisors of Lower Saxony, Membership number 146580, Professional liability insurance with R+V Allgemeine Versicherung AG, Mittlerer Pfad 24, 70499 Stuttgart, Insurance sum: 250,000 euros per individual claim; Annual maximum benefit: 1,000,000 euros (for all damages in one insurance year); The professional regulations apply, in particular the Tax Consultancy Act (StBerG), Implementation Regulations for the Tax Consultancy Act (DVStB), Professional Code (BOStB), Tax Advisor Fee Ordinance (StBVV) (Regulations can be viewed at: https://www.berufsrecht-handbuch.de/, http://www.gesetze-im-internet.de/stberg, www.gesetze-im-internet.de/stbvv/), the professional title of tax advisor was awarded in the Federal Republic of Germany.
