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Control your finances: These taxes are incurred when selling real estate!

Germany has been experiencing a continuous increase in real estate prices for years. As a result, many property owners are considering whether it might not be worthwhile for them to sell their house in order to benefit from the thriving real estate market. While agent and notary fees are well-known costs, the taxes involved are often a vague guess. In this article, we at Koch & Friends would like to give you important information about the possible taxes that may be incurred when selling a house.

Table of Contents

  1. The most important things in brief
  2. Selling real estate: What taxes do you have to pay?
  3. When do you have to pay taxes and what are the exceptions?
  4. The partner at your side

The most important things in brief

  • Various taxes apply when selling real estate in Germany.
  • This includes the speculation tax, the 3-object limit and the income tax.
  • It is important to determine the market value of the property and the speculation period before selling.
  • Koch & Friends is at the side of real estate owners and provides help and advice with planning, calculation and sale.

Selling real estate: What taxes do you have to pay?

If you want to sell your property, there are a few points to consider. These include in particular:
  • Speculation tax
  • 3-object border
  • Income tax on real estate belonging to business assets
The first thing you should consider as a seller of a property is the so-called speculation tax. When you sell a property, you may have to pay a Capital Investment Tax on the profit made. But there are also exceptions here. If you sell a property that is business assets, the profit will be taxed as part of the taxable income of the company. There is no uniform, fixed tax rate in Germany for the amount of the speculation tax. How high the speculation tax is depends on the selling price and your personal tax rate. The tax rate can be up to 45 percent. If you own several properties and want to sell them, you must cross the so-called 3-property limit note next to the speculation period. If you sell three or more properties within five years, you are automatically subject to the rules of commercial property trading (Section 15 of the German Income Tax Act). This also applies retrospectively, meaning if you’ve already sold two homes tax-free, you may have to pay tax on the sale of a third property on all sales.

When do you have to pay taxes and what are the exceptions?

Before you sell a property, you should definitely determine its market value and have them appraised if necessary. Whether a speculation tax has to be paid depends on a special period, the so-called speculation period. If ten years have elapsed between buying and selling the house, the gain is not taxable. However, if you sell your property during the speculation period, you must have lived in the property to avoid paying speculation tax. The speculation period is determined by the date on which the purchase contract is notarized became. If you self-built the property, the speculation period starts on the day you bought the property. So if you’ve owned a piece of land for 15 years, but only built a house on it last year, the speculation period still begins on the Date of purchase of the piece of land, and you don’t have to pay speculation tax on sale.

The partner at your side

In summary, depending on the type of sale and the property involved, there are several tax rules that apply to the sale of real estate. With these tips, you can save yourself unnecessary expenses and get the most out of your sale. Have estimate the value of your property before selling to properly account for any taxes. If you’re unsure what taxes you’ll face when selling your property, consult a professional. We at Koch & Friends are at your disposal with our expert knowledge and our years of experience to the side when selling a property. We are available at the following locations:

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