Private property sale with deferred payment of purchase price.
September 29, 2010 | 25,00 EUR | answered by StB Kiehne Katja Kiehne
Hello,
on 29.09.2009, I legally acquired a developed plot of land with a multi-family house (with externally rented apartments) from my father for a price of 40 thousand euros (price determined by appraiser). The purchase contract states that the purchase price will be deferred until the seller's death, and upon his death will be distributed equally among the heirs.
Question regarding the seller's tax return:
The house was gifted to my father by his parents in 1975. So, I assume there is no private sale transaction, correct?
Question regarding the buyer's income tax return:
Can the deferred purchase price also be considered as acquisition costs and therefore be eligible for depreciation? Or is this not possible because no payment was made in 2009?
Thank you.
I would be happy to answer your inquiry briefly as part of an initial consultation, taking into account your fee budget. Deviating circumstances can result in changes in the tax assessment.
It is assumed that the property with the multi-family house belonged to your father's private assets and no provisions for anticipated succession were made.
Profits from the sale of properties in private assets generally lead to taxable income if the sale took place within 10 years of acquisition. According to your information, this is not the case here, as your father received the house as a gift in 1975 and the inheritance does not constitute an acquisition within the meaning of § 23 EStG. Result: no private sale transaction.
You (as the buyer) can depreciate the acquired property regardless of the timing of payment. The commencement of depreciation is determined by the acquisition of disposal power. Depreciation must be carried out as soon as the building is acquired (R 7.4 para. 1 EStR). Therefore, if you gained disposal power in 2009, you can claim depreciation proportionally.
Sincerely,
Katja Kiehne
Tax Advisor
Dipl.-Finanzwirtin (FH)
