Tax aspects when selling real estate

When selling a property, it is important to understand the potential tax obligations arising from the transaction. Understanding these obligations helps you plan ahead and may potentially reduce your tax burden.

Income Tax on the Disposal of Real Estate

The sale of real estate may be subject to income tax, which is calculated on the difference between the sale price (market value) and the adjusted acquisition value.

Taxable Gain

The tax base is the difference between the sale price and the acquisition value, adjusted for inflation (based on the Producer Price Index for industrial products) and documented investment costs.

Tax Rate

The income tax rate on the sale of real estate is 24%, and may be increased by a local surtax, depending on the taxpayer's place of residence.

Exceptions to Taxation

Certain real estate transactions are exempt from income tax.

Sale or Gift Within the Immediate Family

For example, between spouses, children, and parents.

Owner-Occupied Property

The sale is exempt if the property served as the residence of the seller or members of their immediate family for more than two years from the date of acquisition.

Ownership Exemption

The sale is not subject to income tax if the owner has held the property for more than two years.

Special Cases Subject to Taxation

If you sell more than three properties of the same type within a five-year period, you may become liable to pay income tax on all of the properties sold, not just the last one. The same rule applies to gifted properties.

How Is the Tax Calculated?

The tax is calculated based on the total proceeds from the sale, reduced by the adjusted acquisition value and allowable deductions, including selling expenses and documented costs of property improvements.

Important: Every situation is unique, so we recommend consulting a tax advisor who can help you understand the specific tax implications of your individual circumstances.