An undeveloped plot of land can increase considerably in value over the years - especially in growing regions. However, anyone planning to sell should not only think about the proceeds, but also keep an eye on the tax implications. This is because, under certain conditions, the sale of a property may be subject to tax. If you plan early and know the legal deadlines, you can secure possible tax advantages.
Speculation period: 10 years as a benchmark
Properties that are not used by the owner are subject to speculation tax if they are sold within ten years. This means that the difference between the sale price and the acquisition cost is treated as a private sale transaction - and must be taxed at the personal tax rate. After the ten-year period, however, the profit remains tax-free. Important: The period begins on the date of the notarized purchase agreement.
Special rules for inheritance and gifts
If a property is inherited or given as a gift, the new owner takes over the tax data of the previous owner - including the original acquisition data. This can be an advantage if the ten years have already (or almost) been reached. Anyone intending to sell should therefore check exactly how long the property has been in the family - and wait a little longer before selling if necessary.
Disposal costs reduce the tax burden
Notary fees, estate agent commissions or expenses for soil surveys can be deducted from the profit - provided they are directly related to the sale. Here too, it is worth documenting the costs carefully. Those who receive professional advice can often deduct more than is apparent at first glance. This is particularly relevant for tax purposes in the case of higher sales proceeds.
Conclusion
Selling a property can be lucrative - but only if everything is well prepared for tax purposes. Owners who adhere to deadlines, claim costs correctly and obtain information in good time avoid unpleasant surprises and secure the maximum profit.
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