What tax benefits are there when selling a self-used property?
October 21, 2022 | 50,00 EUR | answered by Otto Dornbusch
Dear tax advisor,
my name is Babette Gallenberg and I am facing the decision to sell my self-occupied property. I acquired the property 10 years ago and have been living in it since then. I have now received an attractive offer for the sale and am considering if there are any tax advantages that I can take advantage of.
Selling my property would bring me a good profit, however, I am concerned about the tax implications. I am wondering if I have to pay taxes on the sales profit and to what extent I can utilize tax benefits to minimize the tax burden. Additionally, I am wondering if there are specific deadlines that I need to consider in order to benefit from tax advantages.
I would like to know if there are ways to optimize the tax aspects of selling my self-occupied property and what tax benefits I can take advantage of. Are there any exemptions that I can utilize or specific regulations that are relevant for me as a seller of self-occupied residential property?
I would be very grateful if you could provide me with specific information and recommendations on how to best structure the sale of my property from a tax perspective. I would greatly appreciate your support and expertise in this area.
Thank you in advance.
Sincerely,
Babette Gallenberg
Dear Ms. Gallenberg,
Thank you for your inquiry regarding the sale of your self-used property and the associated tax implications. It is understandable that you are concerned about the taxation of the sales profit and are looking for ways to minimize the tax burden. I am happy to provide you with specific information and recommendations on how to optimally structure the tax aspects of selling your property.
First and foremost, it is important to know that the sale of a self-used property in Germany is generally tax-free. This means that you usually do not have to pay taxes on the sales profit if you have used the property for your own residential purposes and meet certain conditions. This includes, among other things, living in the property for at least two years and not acquiring it for speculative purposes.
If you meet these requirements, you can benefit from the so-called homeowner's allowance. This allowance allows you to keep a certain amount tax-free when selling your self-used property. The exact amount of the homeowner's allowance depends on various factors, such as the duration of homeownership and other individual circumstances.
There are also other tax benefits you can take advantage of to minimize the tax burden. These include exemptions that apply to the sale of self-used residential property. These exemptions can vary in amount depending on the case, and it is worth claiming them in your tax return.
Regarding the deadlines you need to meet to benefit from tax breaks, it is advisable to contact a tax advisor early on. A tax advisor can help you optimize the tax aspects of the property sale and take advantage of possible tax benefits for you.
Finally, I would like to remind you that tax regulations in the area of property taxation can be complex, and it is advisable to seek individual advice. As a tax advisor, I am available to answer your questions and support you in structuring the tax aspects of your property sale.
I hope this information is helpful to you and I am available to answer any further questions you may have.
Best regards,
Otto Dornbusch
