speculation tax
August 27, 2015 | 25,00 EUR | answered by Anton Pernitschka
Dear Sir or Madam,
We have been living in a condominium since November 2013 without interruption and now wish to sell it. According to my research, we can only sell the apartment in January 2016 in order to avoid paying speculation tax. Is that correct?
We plan to hand over the apartment to the buyer on March 31, 2016 anyway, but we would like to sign the purchase contract with the notary still this year in order to have planning security.
Now my main question:
If we conclude the contract still this year, but enter March 31, 2016 as the handover date, do we have to pay speculation tax or not? Or can the appointment with the notary also take place no earlier than January 2016?
Best regards
Dear inquirer,
In the context of an initial consultation and your fee commitment, while adhering to the regulations of this forum, I would like to answer your questions.
Assets that have been used exclusively for personal residential purposes during the period between acquisition or completion and sale, or in the year of sale and the two preceding years, are exempt from the 10-year period under § 23 of the Income Tax Act (EStG).
The determination of the timing of the sale and acquisition is crucial for calculating the deadlines according to § 23 EStG. According to established case law, the transaction on which all binding agreements regarding the transfer of ownership have been made must be considered. Therefore, the starting point is generally the time of the underlying sale or purchase transaction (in most cases, the time of the purchase contract).
If the transfer of ownership occurs before the contractual agreement, then the focus should be on the actual transaction if the asset has already been handed over to the buyer and they could economically expect the completion of the purchase contract despite the absence of a legally binding agreement.
If the actual transaction is relevant but the economic ownership has already transferred prior to that, then the time of transfer of economic ownership must be considered as the timing of the sale or acquisition, in accordance with the economic perspective required by tax law.
In this case, if we consider the (notarial) purchase agreement, the 3-year period will end in November 2016. Therefore, capital gains tax will apply based on the circumstances presented.
This response is based on the information provided. Missing or incorrect details about the actual situation may affect the legal outcome.
Best regards,
Anton Pernitschka
Tax advisor
