Sale of a property - limited tax liability
November 4, 2021 | 50,00 EUR | answered by Steuerberater Bernd Thomas
Hello,
A lady owns a rental apartment in Germany but lives in another EU country, so the rental income is subject to limited income tax liability (she does not have any other income in Germany). Her husband purchased this apartment in 2005, and he was the only owner listed in the land register. After his death in 2009, the widow inherited the apartment, and she was finally registered as the owner in the land register in December 2011.
Question - if the lady sells the apartment before December 2021, will the profit from the sale be tax-free? In other words, if less than 10 years have passed between the inheritance and the sale, does the ten-year period (for individuals with limited tax liability) begin from the date of the original purchase contract (2005) or from the widow's registration in the land register (Dec. 2011)?
Dear questioner,
I am happy to answer your inquiry based on the information provided in the context of an initial consultation on frag-einen.com. The response is based on the facts you have provided. Missing or incorrect information can affect the legal outcome.
The sale of a rental apartment held in private assets is income tax-free if less than ten years have passed between acquisition (or withdrawal from a business asset) and sale. Gratuitous transfers (e.g. through inheritance or gift) do not count as acquisition, in these cases the acquisition date of the predecessor (e.g. deceased) is relevant.
Whether limited or unlimited tax liability is present is irrelevant for this question.
Therefore, according to the facts, if there has been no allocation to a business asset in the last ten years, the widow can sell income tax-free.
Sincerely,
Bernd Thomas
Tax advisor
Information according to DL-InfoV: Tax consultant Dipl.-Kaufmann (FH) Bernd Thomas, tax consultant, Jöhrensstraße 1, 30559 Hannover, member of the Chamber of Tax Consultants Lower Saxony, membership number 146580, professional indemnity 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 an insurance year); the professional regulations apply, in particular the Tax Consultancy Act (StBerG), implementing regulations to the Tax Consultancy Act (DVStB), professional code (BOStB), Tax Consultant Fee Ordinance (StBVV) (regulations accessible at: https://www.berufsrecht-handbuch.de/, http://www.gesetze-im-internet.de/stberg, www.gesetze-im-internet.de/stbvv/), the professional title of tax consultant was awarded in the Federal Republic of Germany.
