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Note on real estate income tax
Real estate income tax is levied on transactions involving the acquisition of real estate and rights equivalent to real property. As of April 1, 2012, statutory regulations concerning the taxation of the sale of real estate came into force. As a result, a tax burden may arise for sellers even if the sale would have been tax-free under the previously applicable legal situation due to the expiration of the speculation period. But:
In this context, the legislator understands the term “land” to mean undeveloped real estate, but also buildings, condominiums and rights equivalent to land, such as building rights.
The capital gain from the sale of real estate is generally taxed at a rate of 25%. In particular, the main residence of the seller and self-constructed buildings remain exempt from taxation. In addition, there is generally no real estate income tax on donations and inheritances, as there is no proceeds from the sale in the form of consideration and therefore no capital gain.
The profit on properties that were subject to tax on 31 March 2012 (i.e. within the speculation period) and on properties acquired after 31 March 2012 must be calculated specifically. The previous speculation period of generally ten years was abolished. The previous ten-year speculation period is still significant today because “old properties” (most of the properties acquired before 31 March 2002) normally only incur a moderate income tax of 4.2 percent (since 2016; previously 3.5 percent) of the sale proceeds.
As a rule, a lump-sum profit calculation is carried out for properties that were not tax intermittent as of March 31. This results in an effective tax burden for the seller:
- 3.5% of the proceeds from the sale
- 15% of the proceeds from the sale if, for example after 31 December 1987 and after the last purchase against payment, conversion of the property to building land / building area makes building possible for the first time.
A real estate consultant may not and cannot make a binding calculation of the tax burden for professional or liability reasons.
Every sale of real estate requires additional tax advice, in particular to determine whether any exceptions not listed here apply, and to calculate the actual tax. Take advantage of our many years of experience in real estate management! We will be happy to advise you if you have any questions regarding real estate income tax. Simply send us a message and we will get back to you.