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

The content of the handbook opens from the menu below. Click on the arrow symbol to display the subtopics.

Transfer of a summer cottage or garden house

Income tax is not charged on the income derived from the transfer of a summer cottage or garden house if both of the following conditions are met:

  1. the summer cottage or the garden house has been in the taxpayer’s ownership as a movable or an essential part of an immovable for more than two years, and
  2. the size of the registered immovable does not exceed 0.25 hectares.

If the summer cottage or garden house has been acquired by a leasing contract, the beginning date of the ownership is the date on which the leasing contract was concluded.

EXAMPLE
A person bought a garden house for 15,000 euros. 10 years later, only the foundation remained of the garden house. She decided to sell the empty plot and sold it for 30,000 euros. Since at the time of sale an essential part of the immovable, i.e. the garden house, no longer existed and it is not a sale transaction of a garden house but of land, this transaction is not exempt from tax.


Transfer of a summer cottage or garden house, if...

...the summer cottage or garden house is inherited

The successor can only sell the inherited cottage or garden house exempt from tax if both conditions are met: the summer cottage or garden house has been in the successor’s ownership as a movable or an essential part of an immovable for more than two years and the size of the registered immovable does not exceed 0.25 hectares.

If at least one of the conditions is not met, the sale of a cottage or garden house must be declared and income tax must be paid on the gains received. Only the costs incurred by the successor are the acquisition costs of the property, which may be deducted from the taxable gains (subsection 11 of § 38 of the Income Tax Act).

...the summer cottage or garden house is received as a gift

The recipient of the gift can only sell the cottage or garden house received as a gift exempt from tax if both conditions are met: the summer cottage or garden house has been in the person’s ownership as a movable or an essential part of an immovable for more than two years and the size of the registered immovable does not exceed 0.25 hectares.

EXAMPLE
In 2019, grandmother gave her granddaughter a summer cottage with the land belonging to it as a gift. In 2020, the granddaughter sold the cottage. Since the cottage was owned by the granddaughter for only one year, she must pay income tax on the gains received.
It is possible to deduct from income the costs that in the case of immovable property received as a gift, are only the expenses incurred.

Last updated: 24.08.2022

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

Was this page helpful?