Transfer of immovable property

When selling or exchanging land, house or apartment, the question arises – whether income tax is payable on the gains received. If so, how and when to declare the gains and how the tax amount is calculated. You can find answers to these questions in the following guide.

Handbook

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Calculation of taxable gains at exchange of property

Formula for calculating taxable gains derived from exchange of property

market price of the property received by exchange  – acquisition cost of the property exchanged – costs directly related to the exchange of property = gains taxable with income tax

EXAMPLE
Years ago, a person purchased a two-room apartment for 55,000 euros, which he did not use as his residence, but hired out.
Now he is making an exchange transaction to swap his two-room apartment for a three-room apartment.
The market price of both apartments at the time of the exchange, i.e. at the time of the transaction, is 90,000 euros. The costs related to the conclusion of the exchange agreement, including the state fee and notary fees, are 340 euros.
The gain subject to income tax received from the exchange of the apartment is calculated as follows: 90,000 – 55,000 – 340 = 34,660 euros.

In the case of this example, it should be taken into account that the provisions of the contract of sale apply to the exchange contract and that both parties to the contract are both the seller and the buyer at the same time. In general, the prices of exchanged properties are equal.

Last updated: 19.08.2022

Tax-exempt or taxable transaction

This table provides a quick overview of real estate transactions that are exempt from tax when certain conditions are met. For more information about the transaction you are interested in, please view the handbook.

Object of the contract of purchase and sale
Basis of tax exemption 
in the income tax act
To the subject of ownership reform /
a privatiser with the right of pre-emption /
the owneR
To a successor
To a legatee
By gift or other transfer transaction
Property returned in the course of the ownership reform § 15 (4) 5) sale is exempt from tax the tax exemption is passed on the tax exemption is not passed on, gains are taxed the tax exemption is not passed on, gains are taxed
Immovable property obtained by restitution after being unlawfully expropriated and the essential part of which is a dwelling § 15 (5) 2) sale is exempt from tax


the tax exemption is passed on 

the tax exemption is not passed on, gains are taxed the tax exemption is not passed on, gains are taxed
Immovable property privatised with the right of pre-emption and the essential part of which is a dwelling

§ 15 (5) 3)

The dwelling together with land belonging to it has been privatised with the right of pre-emption and the size of the registered immovable property does not exceed 2 hectares.

sale is exempt from tax the tax exemption is not passed on, gains are taxed the tax exemption is not passed on, gains are taxed the tax exemption is not passed on, gains are taxed

Summer cottage or garden house

§ 15 (5) 4)

According to the register of construction works or the land register, the summer cottage or garden house has been in the person’s ownership for more than two years and the size of the registered immovable does not exceed 0.25 hectares.

sale is exempt from tax the tax exemption is not passed on, gains are taxed the tax exemption is not passed on, if conditions are met, then sale is exempt from tax the tax exemption is not passed on, if conditions are met, then sale is exempt from tax

Last updated: 24.08.2022

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