Speculation tax for real estate
February 3, 2012 | 50,00 EUR | answered by Dipl.BW/SB Ulrich Stiller
I inherited a property from an aunt on 10.09.2008. For this property + land, property value: value of the developed land 35,640 + value of the land 90,075. Inheritance tax was paid on the property value of 90,000. The house has since been extensively renovated. I moved into the single-family house as the owner on 29.06.2010. Now I want to sell the house at a profit. My question is, how can I avoid paying capital gains tax? What expenses can I deduct in a tax assessment?
Dear client,
Thank you for your inquiry, which I would like to answer based on the information you provided and in the context of your situation in a preliminary consultation as follows:
In answering your inquiry, I assume that the single-family house (EFH) belongs to your private assets.
In principle, the capital gain must be taxed as a private transaction when you sell the EFH within 10 years of acquisition.
The inheritance, i.e. the gratuitous acquisition by inheritance on 10.09.2008, is not considered an acquisition within the meaning of § 23 of the Income Tax Act (EStG). In the case of gratuitous acquisition, the acquisition of the asset into the private assets by the legal predecessor is attributed to the individual successor for the purposes of this provision (§ 23 (1) EStG).
Therefore, if the one-year period had already expired for your aunt on 10.09.2008, any sale from 11.09.2008 onwards would be tax-free. Assuming that your aunt was the sole owner of the EFH for more than 10 years, the detrimental 10-year period would have expired on the day of her death, 10.09.2008, and you could definitely sell the house tax-free in 2012.
If my assumptions are incorrect, please use the follow-up question or contact me via email at StillerStB@gmx.de.
Best regards,
Ulrich Stiller
Tax consultant/Diploma in Business Administration
