Lawyer Volker Mauch answers the questions on speculation tax and speculation period:

Speculation tax and speculation period

In the world of real estate, it’s easy to lose track of everything, and if you don’t want to hire a professional right away, you’ll have plenty of questions. What do I have to consider when buying? What do I have to consider when selling? What costs can I expect? What regulations are there at all? Things get just as complicated when it comes to taxes: Anyone who has purchased an apartment, a house or a plot of land and wants to sell it again should keep an eye on the time of sale. Within the so-called speculation period, a speculation tax is due for real estate. What is this all about?

Speculation tax – what is it?

In order to prevent an excessive increase in the price of real estate, the legislator introduced the speculation tax. This is not an independent tax, but the colloquial term for the income tax on private sales transactions (§ 23 EStG). The amount of taxation depends on the capital gain and the personal tax rate of the seller, but can be reduced by various factors. These include, for example, the fees for the notary and the broker, the land transfer tax or the costs for the land register entry, but also maintenance costs, expert opinions and, of course, repairs.

Speculation period – when does it expire?

The speculation tax does not only apply to the sale of real estate, but generally to the profitable trading of economic goods. This also includes jewelry, paintings, vintage cars and precious metals. The latter can be sold again after just one year without incurring speculation tax. The speculation period is ten years and begins on the date the purchase agreement is notarized. Anyone who sells their property at a profit during this period will be asked to pay tax by the tax office. If a house or apartment is used by the owner, i.e. for private residential purposes, the period is only three years. This applies, for example, to the children’s student digs if they do not pay rent to their parents and still receive child benefit.

How can the speculation tax be calculated?

The amount of speculation tax depends on the individual case and various factors. A rough example calculation: If you have bought an apartment for 300,000 euros, rent it out and sell it before the deadline of 10 years with a profit of 200,000 euros, you can claim various costs. For example, brokerage and notary fees, but also everything you have put into the property for repairs and maintenance. If this were, for example, a total of 60,000 euros, the taxable profit would only be 140,000 euros. Depending on the personal tax rate, the speculation tax can therefore amount to as much as 63,000 euros.

Tip: If you do not absolutely have to sell, you should definitely wait until the speculation period has expired.

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