General information on calculating taxable profit when selling properties
Capital gain
In any case, the capital gain is calculated using the difference between the proceeds from the sale and the costs of acquisition.
The proceeds from the sale should always be fixed at their actual amount. For the costs of acquisition that are to be deducted, a distinction must be made between:
- "New properties" (regular income calculation: the actual costs of acquisition – adapted if necessary – are deducted here);
- "Old properties" (flat-rate income calculation: in principle, a generous flat-rate value is applied for the costs of acquisition here).
What is decisive for this classification is whether or not the property that was sold was liable for tax on 31 March 2012 (i.e. whether or not the basic ten-year speculation period provided for by law prior to the 1. Stabilitätsgesetz 2012 has not yet expired). The relevant date is the date of acquisition (acquisition for consideration):
"New property" = the property was acquired after 31 March 2002
"Old property" = the property was acquired before 31 March 2002
The proceeds of the sale are to be distinguished from the capital gain: the capital gain results from the difference between the proceeds of the sale and the costs of acquisition.
Reclassification surcharge
When selling land after 30 June 2025, the capital gain resulting from the sale of the land must be increased by a reclassification surcharge of 30 percent. This applies only to land that has been reclassified from green space to building land (or a comparable reclassification) after 31 December 2024.
The reclassification surcharge is limited in amount: the sum of the capital gain and the reclassification surcharge may not exceed the proportionate sale proceeds of the land. The reclassification surcharge concerns both natural and legal persons and applies to both "old properties" and "new properties".
Example
In the year 2010, A purchased undeveloped green space (new property) for 10,000 Euro. In the year 2025, this is reclassified as building land, after which A sells the undeveloped property for 100,000 Euro (the special tax rate of 30 percent applies). The capital gain of 90,000 Euro would generally be increased by a reclassification surcharge of 27,000 Euro (30 percent of 90,000 Euro), resulting in total income of 117,000 Euro. Since this exceeds the proceeds from the sale of 100,000 Euro by 17,000 Euro, the reclassification surcharge is reduced to 10,000 Euro (27,000 Euro minus 17,000 Euro). This results in total income of 100,000 Euro (90,000 Euro plus 10,000 Euro), which corresponds to the proceeds from the sale.
Taking losses into account
In the business sector, depreciations to the lower partial value and losses from the sale of property are primarily to be offset against income from the sale or write-up of such property belonging to the same company. Any remaining negative surplus may be offset at 60 percent with progressively taxed income. If offsetting with other income is not possible during the assessment year, this loss may be carried forward to future assessment years (loss carried forward).
Outside the business sector, 60 percent of the losses from private property sales may either be offset over 15 years with profits from letting and leasing or, upon request, offset in their entirety with income from letting and leasing during the year in which the loss occurs.
