If you sell your real estate, this is mostly tax-free. Above all, owner-occupied property is not subject to income tax when sold. Income tax is only paid on the sale of real estate if it is a speculative transaction. As a rule, however, you have it in your hands to sell a property in such a way that you do not have to pay income tax. In order to avoid possible tax liability as far as possible, you should know the principles according to which, from the point of view of the tax authorities, income tax is payable on the sale of real estate.
Income tax on the sale of real estate
Owner-occupied real estate
You do not pay speculation tax in owner-occupied real estate and therefore also no income tax if you sell an existing property after purchase or a new building after its completion uninterruptedly used by yourself and have lived in it.
The same applies if you had initially rented the property, then terminated the tenancy, moved in yourself and in the year of the sale as well as in then both precedingngenen calendarjahren Have lived in it yourself. You are on the safe side at the latest when more than ten years have passed since purchase and sale. After ten years, profits from speculative transactions also remain tax-free (§ 23 EstG).
So to secure tax exemption, consider moving into a currently rented property before selling it yourself. To justify the termination, you can invoke a legitimate interest and as a reason for termination Own need claim for yourself. Own use for a family member is out of the question. So you have to move into the property yourself. If you have lived in it yourself in the year of the sale and in the two previous years, a sale remains completely tax-free. They do not have to pay tax on a profit, no matter how high it is.
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When is income tax due?
If the conditions for tax exemption are not justified, you may have to pay tax on any gain on sale. The sale of a property is a private sale transaction (§ 23 EstG). Private sales transactions are subject to speculation tax, provided they are completed within specified time periods.
With regard to real estate, 10 years apply, provided you have rented it out or have not lived in it yourself in recent years. In order to understand a possible income tax, you have to calculate in several stages.
Calculate speculative profit
Speculative profit is the difference between the acquisition or production costs and the advertising costs (incidental purchase costs such as land transfer tax, notary fees, broker commission u.a.) on the one hand and the sales proceeds on the other.
A speculative profit is only due if you sell the property after the purchase sell within ten years or have not continuously lived in yourself. If the property was rented out, you must also take into account any depreciation (Afa) and add it to the sales proceeds.
In the case of existing real estate, the depreciation regularly amounts to 2% per year. You can find the respective depreciation in your last income tax returns. There you have applied for the Afa in the form "renting and leasing".
Speculative gains up to 600 € remain tax-free. If you are the co-owner of the property as a spouse, your spouse can also claim the exemption limit of 600 € for him/herself. Owner-occupied real estate, on the other hand, does not allow for depreciation.
In this case, you will be "penalized" for selling the property prematurely. You only profit from depreciation if you have owned the property for at least ten years. However, this aspect should not prevent you from selling the property anyway. Possibly the capital gain exceeds the tax disadvantages so clearly that a sale is well worthwhile.
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Calculating taxable income
Is the amount due to taxable speculative profit you have to estimate your taxable income. Your taxable income consists of your income from employment as an employee or your self-employment income as an entrepreneur or businessman or freelancer. Any rental income from letting and leasing, pensions and annuities or capital gains must also be added.
If you cannot estimate your current income, use your income from previous years as a guide. The taxable income is the amount that results after deduction of income-related expenses, special expenses and extraordinary charges. The taxable income therefore depends on your total income.
Apply your personal tax rate
If you know your approximate taxable income, the income tax to be paid is based on your personal tax rate. The personal tax rate depends on the amount of your taxable income. The higher your income, the higher your tax rate. The highest tax rate is currently 42.
calculate speculative profit
Speculative profit is the difference between the acquisition or production costs and the income-related expenses (ancillary purchase costs such as real estate transfer tax, notary fees, broker commission, etc.).a.) on the one hand and the sales proceeds on the other hand.
A Speculative profit only applies if you sell the property after you have acquired it selling within ten years or have not continuously lived in the property themselves. If the property was rented out, you must also take into account any depreciation (Afa) and add it to the sales proceeds.
In the case of existing real estate, the depreciation regularly amounts to 2% per annum. You can find the respective depreciation on your last income tax returns. There you have applied for the Afa in the form "Renting and leasing".
Speculative gains up to 600 € remain tax-free. If you are the co-owner of the property as a spouse, your spouse can also claim the exemption limit of 600 €. Owner-occupied real estate, on the other hand, does not allow depreciation.
In this case, you will be "penalized" for selling the property prematurely. You only benefit from depreciation if you have owned the property for at least ten years. However, this aspect should not prevent you from selling the property nevertheless. It is possible that the capital gain exceeds the tax disadvantages so significantly that a sale may well be worthwhile.
You are considering selling your property?
Real estate sales in Berlin – with immoeinfach
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Calculating taxable income
Is the property Taxable speculative profit you have to estimate your taxable income. Your taxable income consists of your income from employment as an employee or your self-employed income as a businessman or businesswoman or freelancer. In addition, any rental income from letting and leasing, pensions and annuities, or capital gains.
If you are not able to estimate your current income, you should orientate yourself on your income of the previous years. The taxable income is the amount that results after deduction of income-related expenses, special expenses and extraordinary burdens. The taxable income therefore depends on your total income.
Offsetting with other income
If there is a speculative gain, you can also offset this gain against speculative losses from other private sales transactions (e.g., tax loss from the sale of the property).B. sale of shares).
Gains and losses thus cancel each other out. However, you cannot offset gains from speculative transactions against losses from other types of income. If your taxable income with regard to your salary as an employee would be negative due to high income-related expenses, you would not be able to offset this loss against your speculative gain from the sale of a property.
apply for tax reduction
If you have inherited the property and had to pay inheritance tax on it, you would be burdened twice if you also had to pay income tax on it.
In order to mitigate this double burden, you can apply for tax relief for property already acquired with Inheritance tax burdened income, you can apply for an income tax reduction (§ 35b EstG).
Prerequisite is that you sell the property within sell the property within five years after the inheritance. This is especially the case if you want to inherit and sell a property that the decedent purchased less than ten years ago. However, the high allowances under inheritance tax law generally ensure that inheritance taxes are rarely incurred.
Conclusion
Selling real estate is one thing. To arrange the sale from a tax point of view in such a way that as far as possible no taxes are incurred for it, is the other thing. You should seek advice from a tax expert if you believe that there is a real risk of taxation in your case. For a first orientation we are gladly at your disposal.
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