Ask a tax advisor on the topic of Real estate taxation

Sale of an inherited/gifted property

September 28, 2009 | 20,00 EUR | answered by Michael Herrmann

Dear Sir or Madam,
after my grandmother passed away in February 2009, my mother inherited a house and land worth approximately 200,000 euros and subsequently transferred it to me through a gift. I would like to sell the house now. What taxes will be due and at what rate?
Best regards,
Matthias May

Michael Herrmann

Dear Mr. May,

First of all, thank you for your inquiry, which I would like to answer based on the information provided and in light of your efforts within the scope of an initial consultation. The response is based on the description of the situation. Missing or incorrect information about the actual circumstances can affect the legal outcome.

In answering, I assume that the property is held in private ownership.

In terms of income tax, there may be a private sale transaction, which would be subject to income tax on the profit according to § 23 EStG. However, the profit is only taxable if the real property was acquired within the last 10 years.

In the case of a gift, there is no acquisition, but rather an acquisition free of charge, so the ownership periods of the mother and, since she also did not make an acquisition, the grandmother are credited towards the 10-year period. Therefore, an income tax event only occurs if the acquisition by the grandmother is less than 10 years ago.

Furthermore, in the event of a sale, real estate transfer tax in the amount of 3.5 euros of the purchase price is payable, which the buyer should generally bear. However, from a tax law perspective, the buyer and seller are joint debtors of the real estate transfer tax, so you may have to cover the real estate transfer tax if the buyer cannot pay.

I hope this information has provided you with a sufficient overview of the situation and remain

Yours sincerely

Michael Herrmann
Dipl.-Finanzwirt (FH)
Tax consultant