Sale of vacation apartment - Taxation
July 17, 2013 | 40,00 EUR | answered by Steuerberater Thomas Textoris
Hello,
my husband and I have owned a holiday apartment as a GbR for two years and have been renting it exclusively to holiday guests through a broker. We would like to sell it. What would be the tax implications if we had purchased the apartment for 80,000 euros and sold it for 100,000 euros? Assuming we had made depreciations of 10,000 euros. What would be the tax rate applied to the profit - is it the income tax rate of my husband who is the sole earner? What happens to the input tax deductions on the purchased apartment furnishings? Are there also trade taxes due upon sale - if so, to what extent? Are the depreciations made to be repaid or are they only used by the tax office for profit determination? Are there any other tax matters we need to consider?
Dear inquirer,
In the context of an initial consultation and considering the regulations of this forum, I would like to answer your question.
According to your information, the holiday apartment is rented out exclusively to holiday guests by a broker in a hotel-like manner. Based on your information, I assume that a commercial activity is taking place and that you are generating income from a business operation according to § 15 EStG. The rental is therefore not to be classified in the area of asset management. Please note that the solution may differ if the circumstances change.
Since you operate the rental of the holiday apartment in the form of a GbR, you are selling an entire business operation (§ 16 (1) No. 1 EStG). The capital gain is calculated according to § 16 (2) EStG as follows:
Sales price 100,000,- minus business assets 70,000,- = 60,000,-
Depreciation is deducted from your acquisition costs. This is a simplified representation, as I do not have any further information about the additional business assets (capital). Depreciations that have already been made do not have to be repaid. However, you increase the capital gain by reducing the business assets!
According to the above calculation, a profit of 30,000,- would be allocated to you and your husband each (60,000x1/2).
This capital gain is not subject to trade tax. In principle, you are entitled to an allowance (45,000,- euros) according to § 16 (4) EStG if you and/or your husband have reached the age of 55 or are occupationally disabled in the social security sense. The assessment would be done separately here. This means that, for example, if only your husband has reached the age of 55, he would receive the allowance for his share of the capital gain.
As spouses, the income is subject to your individual tax rate. As spouses, you are entitled to the splitting tax rate. All income of the spouses is to be taken into account, including possibly your share of the capital gain. I cannot tell you the exact tax rate as I would need all income sources for that. Additionally, deductions for special expenses/extraordinary burdens and other tax reductions need to be considered.
From a VAT perspective, a full business transfer may be present according to § 1(1a) UStG if the holiday apartment is sold to another entrepreneur who will also rent it out. In this case, input tax deductions would not need to be corrected. Otherwise, a potential input tax adjustment may be required according to § 15a (1) UStG. The relevant adjustment period here is 5 years. If the acquisition took place 6 years ago, no adjustment is required.
I hope I could provide you with an initial overview.
Best regards,
Thomas Textoris
Tax advisor
