Real estate is a lucrative and high-yield investment property that often experiences a considerable increase in value over time. Many buyers take advantage of this by selling the property after a certain period of time and making a profit from the additional income. However, speculation tax is payable on the sale of residential property after less than 10 years. This period is known as the speculation period. So if you want to sell a condominium after 3 years, for example, you should take this into account in your calculation. However, if you intend to sell the property after more than 10 years, the profit is tax-free. The period begins on the day the purchase contract is signed. This also applies to speculation tax for inherited properties, for which the date of purchase by the deceased is the starting date for the speculation period. Various factors must also be taken into account when asking “when can a property be sold tax-free?”.

In order to save tax on the sale of an apartment and sell it tax-free, you do not always have to wait for the speculation period to expire. There are exceptions for properties that you have lived in yourself. If it can be proven that the apartment has been used by the person selling it in the past two years and in the current year of sale, it is possible to sell the owner-occupied apartment tax-free. The so-called marginal years apply here. This means that if you moved into a property on December 31, 2019, you can sell the owner-occupied property tax-free from January 2021. You can also transfer owner-occupation to your children. However, they must then live in the home continuously for three years and receive child benefit during this time. If this is the case, you have the option of selling the condominium after 3 years and saving the profit tax on the sale of the apartment. Please note the speculation tax for partial rentals. In the case of an apartment building where some of the apartments are rented out, speculation tax must be paid on a pro rata basis. They are only waived for the sale of the owner-occupied apartment.

When selling a property, the following question needs to be clarified: How much tax is due on the sale of a home? To calculate the speculation tax, the profit from the sale is included on the one hand. The personal tax rate according to your income tax return must be taken into account. Costs incurred for repairs or maintenance work, for example, and your own acquisition costs are also deductible. For example, if you want to sell a condominium after 5 years at a price of 300,000 euros, you will incur 10,000 euros in repair and maintenance costs. If the acquisition costs for the property were 250,000 euros, this results in a profit of 40,000 euros. You now calculate the speculation tax using your personal tax rate. If this is around 40 percent according to the income tax certificate, the profit tax on the sale of the apartment is EUR 16,000.

If you would like to sell an apartment tax-free after 10 years, this is generally possible without any problems due to the speculation period ending. In this context, owners with several properties often ask themselves the question “how many apartments can I sell tax-free?”. However, there are some legal regulations that you should be aware of as a private individual in order to avoid being classified as a commercial seller. It is possible to sell up to two apartments tax-free after 10 years. However, if a third property is sold, the first two sales profits may be taxed retroactively. Private sellers should therefore always keep an eye on this so-called three-property limit in order to avoid having to pay tax on the sale of an apartment.