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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Declaration of income and payment of income tax

Taxable period

  • Gains derived from the sale of property are taxed in the taxable period (calendar year) in which money is received from the sales transaction.
  • Gains derived from the exchange of property are taxed in the taxable period in which the ownership is transferred according to the record of the land register.

Declaring income

Income from the transfer of property, intermediation of immovable property and transfer of immovable property reservations is declared in the income tax return of a resident natural person. The income tax return has to be submitted to the Tax and Customs Board no later than April 30 of the year following the year in which the gain was derived.

Read more: Where and how to submit the income tax return

Payment of income tax

Income tax has to be paid to the bank account of the Tax and Customs Board no later than 1 October of the year of submission of the tax return.

Read more: Tax payment options

How to declare

  • gains derived from transfer of property

Gains derived from the transfer of property are declared in the income tax return form A of a resident natural person.

If the seller of the property receives the money during several different taxable periods, the acquisition cost and the costs directly related to the sale are taken into account when calculating the gains of different periods according to the proportion of money received during that taxable period.

At the taxpayer’s request, it is also possible to take into account the acquisition cost and the costs related to the sale to the extent of the money received during the taxable period, i.e. the gains are taxed if the income received exceeds the acquisition cost and the costs related to the transfer.

If the transfer of property is a taxable transaction, but during the taxable period no gain is derived when taking account of the acquisition cost, such transaction must still be declared in order to take the acquisition cost into account.
 

  • income received from intermediation of immovable property 

Income from intermediation of immovable property is generally declared and taxed as business income of a natural person. If the intermediation of immovable property is the business of a natural person, the income received must be declared in the business income declaration form E. A sole proprietor entered in the commercial register can deduct business-related expenses from income. Both income and social tax must be paid on business income.

If the activity of intermediation of immovable property does not correspond to the characteristics of business activity, the income received is declared in the income tax return form A. Income tax is paid on the income, no social tax must be paid.

  • income received from transfer or intermediation of real estate reservations

Income received from the transfer or intermediation of real estate reservations is taxed:

  • as business income (declared on form E) or
  • gains from transfer of property (declared on form A) or
  • as other income (declared on form A).

Last updated: 22.08.2022

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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