Purchase price allocation for a building complex with a subsequent partial interest in sale.
Dear tax expert,
I am planning to purchase a building complex in the near future, consisting of several single and multi-family houses. Since the property is very large and I believe I can achieve a high selling price by selling the detached houses for investment purposes, I am considering dividing and selling two parts of the complex after the purchase.
My question is how I can best anchor this purchase price distribution in the notarial contract in order to achieve the lowest possible selling profit in the sales process.
Land register 1: 1505 sqm land and 985 sqm divided into 4 MFH + 2 SFH.
Land register 2: 395 sqm land with only a shed.
From the Boris database NRW:
Land value: 275 EUR per sqm
Property value for single and two-family houses: 2,240 EUR per sqm
Property value for condominiums: 1,200 EUR per sqm
(values for younger construction year)
Currently, my consideration (division) in the notarial contract looks as follows:
120,000 EUR for House No. 75b (80 sqm) without land
115,000 EUR for House No. 79a (75 sqm) without land
120,000 EUR for plot 194 with an area of 395 sqm without buildings
560,000 EUR for plot 173 with an area of 1505 sqm including buildings No. 79, 81, 83, and 83a with a living area of 828 sqm
The proposed prices for the detached houses are realistic, my question is whether I am required to accept an equal distribution of the property areas here, as the square meter prices for the remaining living space would then amount to 573 EUR per sqm with this proposal. However, the areas available for sale would be valued at 1,500 EUR per sqm.
Can you provide me with specific suggestions for my notarial contract, especially with regard to the sale of the two detached buildings plus land? If I then sell property 75b+79a and plot 194 for 355,000 EUR, would there be no taxable sales proceeds or am I mistaken?
Best regards,
D. R.
