The speculation period is decisive in a private sale transaction whether you have to pay taxes on your profit or not.
You have cleaned out your home and would like to offer a few things for sale. Now, however, you are wondering whether taxes will be due on such a sale. Well, it depends.
If you sell your used kitchen, the rickety bicycle or an old camera to a neighbor, friend or stranger, this is called a private sales transaction in tax law. Trade in used everyday items, you usually make a loss in the process. Because the kitchen, the bicycle and the camera lose their value immediately, no matter how little they are used. Such a loss transaction is not interesting for the tax authorities, you do not have to declare the sale in your tax return.
However, the situation is different if, for example, you sell art or gold at a profit. Then two factors play an important role:
- An exemption limit of 600 euros per year.
- The speculation period of the object.
What is it about the exemption limit for private sales transactions?
If you achieve a so-called capital gain in the context of a private sale transaction, the gain remains tax-free up to an exemption limit of 600 euros. However, if your winnings exceed this exemption limit by even one euro, taxes will be due on the entire winnings.
What about "speculation period meant?
Let’s assume you bought a house. After a few years you want to sell the house again. If you have owned the house for less than ten years, you will usually have to pay taxes on your sales profit – because a ten-year speculation period applies to the sale of a house.
But no rule without exception: when selling a property within ten years, there are also cases in which you do not have to pay taxes on your profit. For example, if you have lived in the house or apartment exclusively yourself or if you have lived in the property yourself in the year of the sale and in the two preceding years. Details on this can be found in our article Spekulationssteuer auf Immobilien sparen (Speculative tax on real estate).
By the way:
As a rule, the day you signed the purchase agreement counts as the start of the ten-year speculation period. And the tax office is precise: exactly ten years count, not a day earlier or later.
For other items, for example a Rolex, only a speculation period of one year applies. So if you own your Rolex for more than 12 months, you can sell the watch at a profit without paying taxes on it. If you own the Rolex for less than a year when you sell it, your gain on sale is taxable.
For which items does the speculation period apply?
The tax authorities distinguish between "objects of everyday use" – i.e. things for daily use such as clothing or furniture – and "economic goods" – i.e. more luxury items. There is no speculation period for everyday consumer goods, but there is for economic goods. However, there is no clear definition of the term asset in tax law.
Despite the lack of a definition of the term, a speculation period applies to the following objects:
|10-year speculation period||1 year speculation period|
|– (rented) houses||– Precious metals and precious stones|
|– (rented) apartments||– Gold bars and gold coins|
|– (undeveloped) land||– Coin and stamp collections|
|– (shares in) closed-end real estate fund(s)||– Antiques and classic cars|
|– Co-ownership shares in rented property||– Jewelry, paintings, art objects|
|– Leasehold||– Trading with virtual currencies|
By the way:
Until 2009, transactions with securities also counted as private sales transactions. However, with the introduction of the final withholding tax, securities transactions moved to income from capital assets for tax purposes.
Are there any particularities in the sale of art?
Art not only embellishes your own four walls, but is also considered a good financial investment. When selling art, there are no special features from a tax point of view. Both the speculation period of one year and the exemption limit of 600 euros apply, provided you have sold the art object at a profit.
However, you should not sell too many works of art from your private property within a short period of time. Because then the tax office quickly assumes you a commercial trade. Already three sales per year can be critical.
Is the sale of gold a private sale transaction?
The bundle of money under grandma’s mattress can significantly lose value – gold, on the other hand, is considered safer. This is why many investors buy gold in times of crisis. But unlike shares, for example, gold does not yield any income. This means: You do not get any interest or similar for the precious metal. Therefore you do not have to pay a final withholding tax for gold. But the sale of gold is considered a private sale transaction. Accordingly, when selling gold:
If you bought the gold yourself more than a year ago, you can sell the precious metal tax-free. No matter how much profit you make. If you sell the gold within twelve months of purchase, however, gains of up to 600 euros per year are tax-free. But from 601 Euro you have to declare the profit in full as "other income" pay tax.
How do I calculate my profit from a private sale of?
This is how you calculate the profit or even loss from a private sale transaction:
|Proceeds from the sale|
|./. Acquisition and production costs|
|./. Incidental acquisition costs|
|./. Income-related expenses in connection with the sale|
|= capital gain or. -loss|
Where do I enter the profit?
You have successfully sold at a profit? Then enter the profit sum in the "Anlage SO" a. You are obliged to do this as soon as your net profit from a private sale transaction exceeds 600 EUR.
How to deal with losses?
It all depends on what you have sold at a loss. As already described at the beginning of the article, you cannot claim losses from the sale of everyday items in your tax return. Losses from the sale of art, gold, jewelry and the like can be offset against other speculative gains.
How much tax is due within the speculation period??
If you achieve a capital gain within the speculation period that exceeds the exemption limit, taxes will be due. How much tax you have to pay depends on your personal situation. The tax authorities tax private sales transactions at the personal tax rate.
By the way:
Our advisors are fit in the matter of speculation period and are happy to assist you with your private disposal transactions with advice and action. Find an advice center near you now and become a VLH member: advisor search.