When you sell your condominium or other property, the tax office often requires you to pay speculation tax. However, not all properties are affected by this. For example, speculation tax is not payable if you have owned the property for more than ten years. But that’s not all, because there are always other legal ways of avoiding speculation tax.
There is no generally applicable information on the amount of speculation tax. Under certain circumstances, it can be up to 45 percent.
Find out how high the speculation tax is on the sale of real estate and how it can possibly be avoided.
How can you calculate the speculation tax for real estate?
Section 23 EStG stipulates that speculation tax is levied on income from private sales transactions. This also includes the private sale of a condominium or other property.
If you want to sell your property and speculation tax is due, the question naturally arises: How high is the speculation tax on the sale of real estate? Various factors are taken into account, which vary greatly depending on the type and previous use of the property. In principle, the following calculation can be made:
- Sales price of the condominium or property
- minus acquisition value
- minus income-related expenses incurred in connection with the sale
- results in sales profit
The proportion of the property used by the owner is then deducted from the profit from the real estate transaction. The taxable profit from the sale is offset against the seller’s personal income tax rate. The result is the speculation tax to be paid.
Do you always have to pay speculation tax when selling a condominium?
The answer is no. There are various scenarios in which no speculation tax has to be paid when selling the property. The criteria for this are met, for example, if you have used the condominium exclusively for yourself for a period of three or more years. If the apartment has been rented out for more than ten years, no speculation tax is due either. If you have rented out the condominium for less than ten years but used it yourself in the year of sale and the two years before, you will avoid speculation tax.
Speculation tax in accordance with Section 23 EStG is payable if there are less than ten years between the purchase and sale of the rented property.
Is the sale of a property a speculative gain?
If you purchase a plot of land, a house or a condominium, you may do so with the intention of generating a return. If you sell the investment property before the end of the speculation period, you will have to pay speculation tax on the profit from the real estate transaction. How high the speculation tax is on the sale of real estate depends on several factors.
If you have bought a property as an investment property and sell it again within a short period of time, you must pay tax on the speculative gain at the rate of your income tax. The sale of a property can therefore be a speculative gain.
