Taxes if house is credit free

67 posts in this topic

34 minutes ago, stevekerr said:

Pretty sure that's not accurate at all, based on all the information in this thread. Not gonna repeat it all again but have a look at PandaMunich posts of the first page. 
 

 

Do you mean the part where she says

On 11/3/2011, 10:48:56, PandaMunich said:

the profit is only tax free if you had been living in it at least in the year you sold it and in the last two full calendar years.

 

or the part where she says

On 7/23/2015, 6:55:20, PandaMunich said:

you need to have lived in it for during the year you sold it, plus in the 2 preceding years.

?

 

If you're going to try your hand at house-flipping, expect to be taxed accordingly, even if you do register there (fictitiously or not) for the month between purchase and sale.

 

You should also know that it takes anywhere from 3-9 months to get everything recorded in the Grundbuch, so you may not even be able to buy and sell as quickly as you think.

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No, he means the one where I said:

 

On 11/3/2011, 10:48:56, PandaMunich said:

Ok, let's go back to the law on this, §23 EStG:

...

So, to break this up into the above three cases cited in the law:

  • you sell a house/apartment in which you didn't live yourself, e.g. it stood empty all the time or was rented to somebody:
    the profit (= Spekulationsgewinn) is only tax free if you sell it 10 years or more after the date you bought it
     
  • you sell a house only you lived in:
    the profit is always tax free, no matter how soon you sell it (no minimum holding period).

     
  • you sell a house/apartment that was rented to someboday, but in the period before you sold it, you moved in and used it yourself:
    the profit is only tax free if you had been living in it at least in the year you sold it and in the last two full calendar years. Example: you sell in 2011 a house/apartment you had previously rented out, this means that in order for the profit to be tax free, you would have had to have moved into that house/apartment on 31. December 2008 at the very latest (--> full year 2009, full year 2010, rump year 2011 until the date you sold).

 

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Yes exactly. The way I understand what Panda said, that would theoretically work? It's just for curiosity.

Also, yes, I can "expect to be taxed accordingly", but still, I'm really only interested in the law, not in what I expect or am supposed to expect. 

 

If I bought a place, registered there, sold as soon as possible, sounds to me like it would be tax free. I'm just trying to verify this theory. 

For instance the Grundbuch timing issue cited by El Jeffo, I had no idea about that. I guess it would be just a matter of waiting however long that takes before selling then.

 


 

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You might be able to get away with it once, but if you buy or sell more than three properties within five years, the Finanzamt will simply declare that you're doing it commercially. In that case, you could be expected to pay retroactively for every deal from the first one. And you'll likely face penalties and/or fines for running an unlicensed commercial business.

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4 hours ago, someonesdaughter said:

 

Why would Krieg do that? You asked, not Krieg... Read the §23 EStG, cited by Panda on page 1. 

 

 

 

yeah I asked a specific thing. I'm just saying that his answer seems not correct to me. don't mean to offend anyone, but if I ask something doesn't mean I know nothing.
That does not seem correct to me sorry. I haven't read of a minimum waiting period anywhere if the flat has been always and only occupied by the owner.
But that's why I'm asking, in case there's anything else I'm not aware of. 
 

4 hours ago, Krieg said:

 

You have to wait 10 years or live there for 2 or 3 years, 1 month living there won't cut it.  Otherwise all profits will be heavily taxed.


- 10 Years: everything is tax free after that. Doesn't really matter what you've done with the flat in those 10 years for all I know. Maybe something applies if it's been used as a home office or something like that, but not relevant to my question anyways. 

- 2 calendar years + the year in which you're selling: that's the waiting period in order to be tax free when the house has been previously rented or also simply occupied by someone else apart from the owner (of course they'd have to have been registered there). 

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17 hours ago, El Jeffo said:

You might be able to get away with it once, but if you buy or sell more than three properties within five years, the Finanzamt will simply declare that you're doing it commercially. In that case, you could be expected to pay retroactively for every deal from the first one. And you'll likely face penalties and/or fines for running an unlicensed commercial business.

 

Oh that's also interesting. I really was just thinking about the one so that would be enough. But also would be interesting to know more about this, what defines buying and selling as commercial etc. If I'm not mistaken I remember Panda saying that if you sell right after you buy basically the law allows you to do it tax free because it's unlikely you'll make any profit, considering the almost 15% of expenses involved in the purchase. But I might be misquoting here, this just something I remember from an old thread. 

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