When selling real estate from private assets, the 10-year period of § 23 EStG must be observed. If the property is resold less than 10 years after its purchase, the profit is subject to the personal income tax rate of the previous owner. For own residential purposes, however, exceptions apply. If property was used exclusively for own residential purposes between purchase and sale, the capital gain is not subject to taxation! We show what the legislator understands exactly by “own residential purposes”.
Principle 1: Taxable profits from private sale transactions
According to § 22 no. 2 EStG, profits from private sales transactions are subject to income tax in full. This usually means that up to 45 % income tax is payable on the difference between the proceeds of the sale, the costs of the sale and the acquisition costs. In addition, there is a solidarity surcharge and, if necessary, church tax.
What is a private sale transaction is regulated by § 23 EStG. In the case of real estate, there is always a taxation according to this provision if the object
This article does not replace tax or legal advice in an individual case. Facts, current law, jurisdiction, documentation and implementation remain decisive.