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Speculation tax on real estate: amount, deadlines and savings tips

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These deadlines must be observed

The tax on the sale of real estate is not always due, but only in certain cases. It is payable on the sale of a rented apartment or a corresponding house, if the property was not used by the owner himself. In addition, a profit must have been made in the transaction - the so-called speculative profit - and it must have taken place within the speculation period. For the sale of real estate, this period is ten years. This means that if you have owned the property for more than ten years, you do not have to pay the speculation tax on a condominium, land or house to the tax office. If you or your children have lived in the property yourself, a shortened period of three years applies to the speculation tax for owner-occupation. The beginning and end of the period are marked by the date of notarization of the purchase contract. When selling an apartment building in which you have used one of the apartments yourself, the tax is calculated on a pro rata basis. In the past, there have been repeated speculations about the abolition of the speculation period, also known as the holding period. In some party programs of the current traffic light government there are plans for this, but so far these have not been implemented.

Calculation example

There is no fixed tax rate. How much you have to pay tax on your speculative gains depends on the sales price and the personal income tax rate of the seller. In principle, the sale can be taxed at up to 45%. The previous purchase price, the selling costs - for example, broker and notary fees or costs for advertisements - and the acquisition costs also have a reducing effect on the taxes. For example, if you sell your house, which you bought for 150,000 euros and for which you incurred expenses of 10,000 euros for the sale, for a price of 250,000 euros, this results in a profit of 90,000 euros. To determine the taxation for the speculative gain, consider your individual income tax rate. If it is 40%, you can expect a tax amount of 36,000 euros to be paid to the tax office.

The start of the speculation period for real estate is the date of acquisition of an object

Avoid speculation taxes and save money

To avoid paying tax on speculative transactions in real estate, it is advisable to wait until the holding period of ten years has elapsed before selling the property. After that, it is possible to sell the property profitably without having to pay taxes. In addition, there is a free allowance of 600 euros per year for profits from private sales transactions for the sale. Moreover, you avoid the tax if you have lived in the property yourself in the year of sale as well as in the two years before. Another option to avoid the deadline for the taxation of the sale of real estate is the so-called lease-purchase. Here, the buyer initially moves into the property and pays rent to the seller.

This is credited to the purchase price until it is paid off in full. Alternatively, it is possible to conclude a preliminary contract in which the seller receives a notarized guarantee from the buyer to purchase the property. The actual sale then takes place after the period for speculative transactions has expired. On the other hand, it does not always make sense to avoid the tax by making a gift. Although speculation tax does not apply in the case of a gift, a gift tax may apply. The tax can also be reduced by numerous items, for example costs for notary or broker, refurbishment expenses, land transfer tax or the costs for land register registration. All these expenses reduce the profit and thus the tax burden.

Frequently asked questions

Written by:

Stefanie Aust, Guest Writer

Stefanie loves to put complex topics from the real estate world into understandable and inspiring words. Whether it's about the right financing, choosing the right type of flat, or a successful property search: Stefanie is happy to inform you.

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