That is why a private apartment sale is worth

Selling an apartment privately offers many advantages for the seller. By not using a real estate agent, one saves the agent’s commission, which can normally amount to a considerable sum. In addition, one retains control over the sales process and can decide for oneself how to present the apartment and what price strategy to pursue.

These advantages speak for a private apartment sale:

• No broker commission
• Control over the sales process
• Personal contact
• Flexibility
• More profit
• Faster processing

However, private sellers do not always bring the necessary expertise to successfuly complete an independent apartment sale without problems and time delays. However, lack of experience is by no means an obstacle. What you need to know about the process, costs, documents, etc., and more here.

Sell apartment privately: This is what you should consider

Selling an apartment privately can be a good option to save realtor costs and take the sale into your own hands. In this case, the owner takes over all tasks related to the sale, such as the preparation of advertisements, the organization of viewing appointments and negotiations, as well as the preparation and review of the necessary documents and records.

Determine real estate value

However, there are some things to consider when selling an apartment privately. One important thing is the apartment appraisal: the owner needs to know the current market value of the apartment to ensure that it is sold at a fair price. A professional real estate appraisal can help determine the exact value of the apartment.

Such a valuation of the object you can either do independently or put in professional hands.

Calculate costs in advance

If you decide to hire a professional appraiser to value your property, this is only a fraction of the costs you will incur. After all, taxes and fees are also incurred in the case of a private sale of an apartment.

Here are some of the most common costs you should consider:

• Costs for the energy certificate
• Fees for the extract from the land register
• Expert’s fee for the valuation
• Notary fees
• Taxes
• Marketing costs
• Renovation costs, if applicable

Prepare apartment for sale

It is also important to prepare the apartment for sale and keep it in good condition. Minor repairs and renovations can help increase the value of the apartment and raise the interest of potential buyers. An appealing presentation of the apartment, such as through professional photos and virtual tours, can also help the apartment sell faster and for a better price.

Whether it’s small repairs, renovation or modernization – to get the best possible out of your home, you should take enough time.

This leads us to the next point: creating an exposé.

Create a meaningful exposé

In order to appeal to potential buyers, it is important to create a convincing exposé. This is an important sales tool that presents the apartment in an appealing way and attracts potential buyers.

This is what you should consider when creating a synopsis:

• Use high quality photos
• Describe the apartment in detail
• List the most important features
• Use an appealing design

Assemble important documents

Finally, it is important to prepare and review the necessary documents to smoothly complete the sale. These include, for example, the purchase contract, the energy certificate and other relevant documents.

You should compile these documents in advance:

• Land register excerpt
• Energy certificate
• Parcel map and floor plan
• Building description
• Calculation of the living space
• Maintenance measures Installation
• Overview of the house payments
• Purchase contract

As mentioned earlier, there are also fees associated with a private residential sale. One of the most important costs: Tax. So let’s take a look at what taxes you can expect to pay as a private apartment seller.

Are taxes due on a private sale?

The answer: Yes, taxes may also be due on a private sale of an apartment. However, the type and amount of taxes depends on various factors, such as the value of the apartment, as well as the duration of ownership.

Speculation tax: sale within 10 years

Speculation tax is due if you resell your apartment within the speculation period of 10 years. So if you want to avoid speculation tax, you should make sure that there are at least ten years between the purchase of your apartment and the sale. Exception: You have occupied the apartment yourself and have not rented it out.

Three-object limit: commercial real estate trade

The so-called three-property limit must also be taken into account. If you sell 3 or more properties within 5 years, your apartment sale no longer counts as private asset management, but as commercial property trading, for which additional taxes are incurred.

Conclusion: Good preparation is half the battle

In summary, selling an apartment privately can be a good option to save a broker’s commission and take the sale into your own hands. However, it requires some work and knowledge to successfuly complete the sale. If you take enough time to prepare in advance, nothing will stand in the way of a successful apartment sale.

Is the sale of an apartment tax-free?

Similar to the purchase of a house, apartment and land, taxes may also be due on the sale. The taxes you have to pay and the amount of tax you have to pay depend on the value of the property as well as on the use of the apartment. Under certain circumstances you can save taxes. The so-called speculation tax plays a major role.

Speculation tax for rental & owner occupancy

As a rule, speculation tax is incurred if a property is resold within a certain period after purchase and was not used as a primary residence. In Germany, this speculation period is generally 10 years. If the sale takes place within this period, the profit generated by the sale is subject to income tax and is referred to as speculation tax.

Tax-free if there are more than 10 years between purchase and sale

If you or your children have lived in the apartment yourself, no speculation tax is due, even if less than 10 years have passed between the purchase and sale. However, if the apartment is a rental property, you should observe the speculation period.

Commercial trade from three-object limit

The three-property limit usually affects real estate dealers and speculators who buy and sell a large number of properties in a short period of time. If a seller sells more than three properties within a five-year period, this may result in the seller being classified as a commercial real estate dealer and thus becoming liable for tax. In this case, the capital gains may be taxed as income, resulting in a higher tax burden.

So, if you have already sold several properties recently, it is recommended that you sell your home only after 5 years to avoid additional taxes.

Taxes on inheritance and donation

But what taxes apply if the apartment is an inherited property? If you decide to sell an inherited apartment, it may well be subject to a speculation period. Here, too, the decisive question is: owner-occupation or rental?

However, a special feature must be taken into account: The start of the speculation period is not the date of inheritance or gift, but the date on which the apartment was acquired by its original owner.

With the inheritance, the speculation period attached to it therefore also passes to the heir

If, for example, you inherit an apartment as a rental property that was purchased 15 years ago, the speculation period is over and you can sell the apartment without having to pay speculation tax.

Conclusion: How to save taxes

In summary, various taxes can be incurred when selling an apartment. The speculation period and the three-object limit play a particularly important role. Special regulations also apply to the sale of an apartment after an inheritance or gift, which require consideration. It is therefore advisable to find out about the relevant tax rules and regulations before selling an apartment and to factor the tax payments involved into your costs.