Speculation period for real estate or features of self-occupation
July 8, 2019 | 30,00 EUR | answered by Dipl.-Kfm. Frank-Olaf Illiges
Dear Madam,
Dear Sir,
I have a question regarding the speculation period for a self-occupied existing property (condominium).
Facts
I purchased a condominium on 02.12.2009 (date of notarial deed). The entry in the land register was made on 19.02.2010. The apartment has never been rented since the purchase, but I spend over 90% of my time with my family for family reasons. The house of my family, where I am also registered, is located in the same district (same tax office). Due to the good market prices, I am now considering selling this apartment.
Question
To the best of my knowledge, according to § 23 EStG, the sale of a property used exclusively for own use is tax-free, or tax-free if it has been used exclusively for own use in the year of sale and the two preceding years. Can the tax office deny me the tax-free sale because I am not registered in the condominium or because I hardly inhabit it (energy consumption is almost limited to the common areas)? If so, would the relevant date be 02.12.2009 (notarial deed), which is my current understanding, or the entry in the land register?
Could you please provide me with the sources for your response that I can refer to in case of any problems with the tax office.
Thank you in advance!
Dear inquirer,
Thank you for your inquiry, which I will gladly answer taking into account your contribution and the rules of this platform.
The expression "use for one's own residential purposes" simply requires that the property is habitable and is actually inhabited by the taxpayer (BFH IX R 37/16 dated 27.6.17, BStBl II 17, 1192). Using for residential purposes means living there. Living in a flat is different from occasional (visiting) stays. It generally requires running a separate household, a certain level of furnishing, and probably also a certain duration of stay. Simply maintaining a flat without actual use cannot be considered as living in it. The taxpayer must generally live in the flat themselves (i.e. in person). Shared use by family members or third parties is permissible as long as the taxpayer is able to maintain a separate household (relevant BMF dated 5.10.00, BStBl I 00, 1383 point 22).
A flat is also deemed to be used for one's own residential purposes if the taxpayer only temporarily resides in it, as long as it is available to them as a dwelling (at all times) during the remaining time (BFH IX R 37/16 dated 27.6.17, BStBl II 17, 1192). "Use for one's own residential purposes" does not require it to be the main residence or for the main focus of personal and family life to be there. Therefore, a taxpayer may use multiple buildings simultaneously for their own residential purposes. The actual duration of living there is generally irrelevant, as long as there is actual residential use (see overall BFH IX R 37/16 dated 27.6.17 BStBl II 17, 1192 and further references).
The holding period begins at the end of the day of the legally binding conclusion of the mandatory purchase (sale) agreement (established case law, e.g. BFH VIII R 16/83 dated 13.12.83, BStBl II 84, 311; see point 97 and 121).
In other words, the holding period starts on the day the purchase of the flat is notarized and ends on the day the sale of the flat is notarized. An exception is if the benefits and burdens of the flat were to transfer earlier.
Kind regards,
Dipl.-Kfm. Frank-Olaf Illiges
Tax advisor
Ringstraße 98
33378 Rheda-Wiedenbrück
Phone: 05242/4055666
Fax: 05242/4055677
Email: office@illiges-steuerberatung.de
Website: www.illiges-steuerberatung.de
