Ask a tax advisor on the topic of Real estate taxation

Taxing capital gains on gifted property

January 10, 2022 | 50,00 EUR | answered by Steuerberater Knut Christiansen

In 2017, my husband received an apartment from his mother as a gift. The condominium is located in 68723 Schwetzingen (Baden-Württemberg).
This condominium was acquired in 1974 by my husband's parents and has been used by both parents since then. After the father's death, his wife (my husband's mother) inherited the condominium as the sole heir.
In 2017, the mother then gifted this apartment to her son. The calculated value of the apartment at that time (2017) was 84,000 euros. This value was recorded in the notarial gift contract.
Now my husband wants to sell this condominium. In the meantime, the apartment has been renovated and modernized by my husband at his own expense.
Since the gift in 2017, the apartment has not been occupied or used by my husband (the recipient) himself. It has been rented out since the time of the gift (until now). The current value of the condominium is estimated by the real estate agent at around 250,000 euros, due to the renovation and high demand for real estate.
In the event of a sale, does my husband have to pay taxes on the profit from the sale, and if so, how much?
Thank you and best regards,
Cordelia Baban

Steuerberater Knut Christiansen

Good day and thank you for using ask-a-tax-expert!

I would like to provide you with the following information regarding your question.

Due to the gift made in 2017, your husband became the legal successor of your mother, who in turn was the legal successor of her husband. With the legal succession, the original acquisition date from 1974 is also transferred/adopted, so that when selling in 2022, the 10-year period of § 23 EStG has long passed. Therefore, there is no taxable private sale within the meaning of § 23 EStG. There is no need to expect a tax liability.

I hope this answers your question, but feel free to ask any further questions free of charge.

I would like to point out that this forum cannot replace a detailed and personal tax consultation, but is primarily intended to provide an initial tax assessment. The legal assessment of your issue could differ if relevant information is added or omitted.

Best regards,

Knut Christiansen
Tax Advisor