Speculation tax real estate: sale of land, apartment, house incl. amount & deadline
How much is the speculation tax? When is speculation tax payable? Or when is there no speculation tax? This tax is important when you sell a property. No matter if it is a plot of land, an apartment, a house or an apartment building. Learn more about real estate sales here : Taxes.
Speculation tax simply explained
The name says it all, this tax is intended to limit speculation in the real estate market. Therefore, the legislator says: If you buy a property, you can only sell it tax-free after X years. X = years differ depending on whether you bought the property as an investment (rent) or live in it yourself (owner occupation).
Profits over 600 euros (tax-free amount, EStG § 23) must be declared in your tax return. You enter the profits in the annex “Other income”.
Let’s get back to the Frist difference.
Distinction: renting (capital investment) / own use
The speculation period differs depending on whether you buy a property as an investment to rent it out. Or whether you buy a property for your own use, i.e. you live in it yourself.
- Third party use – 10 years
- Self-interest – 3 years
Speculation tax only applies to private sales
The tax can be found in the Income Tax Act (EStG), §22 Types of other income, more precisely in §22 paragraph 2: “Income from private sales transactions within the meaning of § 23;” – so it is a tax that is levied only on private sales.
- § 23 Private sales transactions – external
If you sell commercially, you are taxed differently. Therefore, you should also know the 3-object rule. It states that who sells 3 properties within 5 years, falls under the commercial real estate trade.
Example: Time limit for capital investment / personal use
Directly two more practical examples on speculation tax.
Speculation tax capital investment
Speculation tax applies – you buy a property at the age of 42, rent it out and sell it at the age of 50, then you have bought and sold the property within eight years. Accordingly, speculation tax is incurred.
- < 10 years held = speculation tax
Speculation tax does not apply – you also buy your property at the age of 42 and sell part of it at the age of 53. So there are more than 10 years between the purchase and sale of the property. Accordingly, no speculation tax is incurred.
- > Held for 10 years = No speculation tax
Speculation tax self-interest
In the case of personal use, the time periods change to a period of 3 years. Everything else remains the same, including the amount of speculation tax.
Speculation tax amount
Now to the most important question, what is the tax on the sale?
What is the speculation tax?
There is no fixed tax rate for speculation tax. Your tax office calculates the amount with your respective tax level.
Own income tax rate at 40%
- Profit from sale: 20,000 euros
- Speculation tax (40%): 8,000 euros
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