Speculation tax on real estate acquisition and sale
September 12, 2021 | 30,00 EUR | answered by Steuerberater Knut Christiansen
Hello!
My grandmother passed away last year and left her property (real estate) to the city. I, the granddaughter, am entitled to a compulsory portion and will receive 50% of the inheritance.
I now have the choice between the money or the property.
If I choose the property, which I plan to sell afterwards (either through a real estate agent or to the neighbors), the question now arises of what taxes will apply (capital gains tax?!). Unfortunately, my tax advisor does not give me a definitive answer on this matter.
1. Is capital gains tax due upon taking over the property?
2. Is capital gains tax due upon selling the property?
For your information: The property has been vacant since my grandmother's death. The new owner is the city. Before her death, the property was inhabited by my grandparents, who also built the house themselves. Around 1978.
Market value according to the current appraisal: 545,000 euros.
My tax advisor mentioned something about the property being "evaluated" at 380,000 euros..is this relevant for the calculation of capital gains tax, if applicable? And what percentage would apply to me if I have to pay it?
Since there is a lot at stake, I would need a definitive answer, as I would have to pay a lot of taxes in case I have to, and taking over the property would not be worth it then.
Thank you!
Kind regards,
Marion Heinzelmann
Good day,
I am happy to provide you with initial tax advice based on the information you provided and the offered fee. However, due to the low fee, of which I receive 50% from the platform, I cannot offer you a long and detailed consultation here. I ask for your understanding in this regard.
A compulsory portion claim is a monetary claim. In the income tax guidelines (EStH), it is regulated, among other things, as follows:
"If compulsory portion claims are settled by the transfer of assets, businesses, partial businesses, or partnership interests located in the estate, an essentially paid transfer takes place. This means that the heir sells the individual asset, business, partial business, or partnership interest and the compulsory portion beneficiary has acquisition costs for the received assets in the amount of his compulsory portion claim (Federal Fiscal Court ruling of December 16, 2004 - BStBl 2005 II p. 554)."
This means in relation to your questions:
The city, as the heir, is the legal successor of your grandmother and thus also assumes the acquisition date. If this date is more than 10 years ago, the city can sell the property to you without capital gains tax (= compensating the compulsory portion claim). Otherwise, the city would have to pay tax on the sale, not you, because you did not become the heir anyway.
If you receive the property instead of money, according to EStH there is an acquisition transaction for you as the compulsory portion beneficiary (you are essentially exchanging a monetary claim for a property, which is equivalent to a purchase). If you then sell the property within 10 years, there is a private sales transaction. This is taxable, so income tax is due on any potential profit.
Therefore, if the sale price exceeds your monetary claim (= acquisition cost), a capital gain is generated. This is subject to income tax ("capital gains tax") at your personal tax rate.
Please note that this forum only allows for an initial tax assessment. Missing or incomplete information can alter the legal result.
Kind regards,
Knut Christiansen
Tax consultant
