Sale after 10 years
February 3, 2022 | 50,00 EUR | answered by Steuerberater Knut Christiansen
Dear Sir or Madam,
In 2012, I purchased several condominiums in Germany that I now want to sell. In total, there are nine apartments. Normally, by selling nine apartments, corresponding counting objects would be generated, which could classify me as a commercial real estate trader by the tax office. So far, I have been classified as a private investor and I would like to keep it that way. (I still have seven other investment apartments that I want to keep.)
In my opinion, there is a protective effect for the classification as a commercial real estate trader if I have owned the apartments for at least ten years before selling them. Question: Is my assumption correct? If yes, how exactly is the 10-year period calculated? Do 10 years have to lie between the two notarization dates of purchase? Are the dates of the land register entry relevant? Or which data is relevant for calculating the period? I would like to offer the apartments as soon as possible, but of course I want to avoid falling short of the 10-year period.
Final question: Until now, the regulation was that the realized real estate profit was tax-free after a 10-year holding period. Is this fact still valid under the new government?
Thank you for answering my questions.
Good morning and thank you for using frag-einen.com!
I would like to provide you with the following feedback regarding your questions.
The period you mentioned is referenced in the BMF letter on commercial real estate trading. It states (https://datenbank.nwb.de/Dokument/129733/):
"If developed properties have been rented out for a long period (at least ten years) until sale, the sale of the developed properties is generally also part of private asset management (cf. BFH judgment of April 6, 1990, BStBl II p. 1057). This is independent of the extent of the real estate sold."
This means: for the relevant apartments, you should have had rental income for at least 10 years. It depends on when you had the status as a landlord (usually at the transfer of benefits and burdens). The date of the purchase agreement is less relevant than when calculating the speculation period. The entry in the land register is also not deadline-triggering, as this date is random (depending on the workload of the land registry office).
There are currently no publicly announced plans or draft laws stating that the 10-year speculation period will definitively be eliminated. This means that it can still be expected that sales after 10 years will not fall under the taxation of § 23 EStG.
I hope this answers your question, otherwise feel free to ask further questions at no cost.
I would like to point out that this forum cannot replace comprehensive and personal tax advice but is primarily intended to provide an initial tax assessment. Adding or omitting relevant information could result in a different legal assessment of your issue.
Best regards,
Knut Christiansen
Tax advisor
