Sale to relatives
November 20, 2011 | 50,00 EUR | answered by Dr. Yanqiong Bolik
I bought a house for 365,000 DM with a purchase contract on 23.11.2011. This house was modernized. The purchase price was paid on 27.12.2001. The final entry in the land register was made on 27.02.2002. I now want to sell the property to my son and his wife for 209,000 euros on 30.06.2012. Is this tax-neutral? The house has been inhabited by my son's family since the modernization. The rent is 75% of the local market rent. Losses from rental and leasing have been recognized by the tax office so far. When does the 10-year period end? Does it start with the payment of the original purchase price or with the entry in the land register at that time? Are the 10 years calendar years or 120 months?
Dear inquirer,
Thank you for your inquiry, which I am happy to answer taking into consideration your input as well as the rules of this platform.
Please note that my explanation is based on the facts presented, and that adding, omitting, changing information, or the ambiguity of information can change the tax result.
I assume that you acquired the mentioned property with the purchase agreement dated 23.11.2001 (apparently there is a typographical error in the purchase agreement date "23.11.2011").
Since the property is used for generating rental and leasing income, it is part of your personal assets.
Any potential capital gain will only be taxed if the period between acquisition and disposal does not exceed 10 years. The 10-year period starts from the moment of acquisition. The point of acquisition is generally determined by the time of the commitment agreement, not the real estate transaction. In your case, the period starts with the notarization of the purchase agreement (on 23.11.2001). Therefore, a non-harmful disposal is only possible from 24.11.2011 onwards. For the calculation of the disposal period in relation to the disposal time, the obligatory contracts are generally relevant (consistent case law; Federal Fiscal Court IX R 14/03). However, transferring the economic ownership of the property within the 10-year period is questionable. A binding sales offer within the 10-year period could also be detrimental.
I hope I could assist you.
If there is still any uncertainty, please feel free to use the follow-up function.
Best regards,
Dr. Yanqiong Bolik
Tax consultant
Bildstöckle 6, 70567 Stuttgart
Tel: +49 (0) 711 / 9332 2657
Email: info@zdbz.de
