Whether you have to pay tax on the profit you make when selling a house or flat depends on the specific situation. If you are active in real estate as a private individual, with the aim of buying and selling properties at a profit, you always have to pay tax on the profit through personal income tax. In this case, the tax authorities consider the profit as a form of professional income, which is taxed at the normal personal income tax rates, up to 50 per cent.
If you bought the property purely for private purposes, different rules apply. A distinction is made between a family home and a second residence. If you sell the family home at a profit, you should not pay tax on that profit; an exemption applies. But if it is a second residence or a property you rent out, you do have to pay capital gains tax of 16.5 per cent (plus council tax) in certain cases.
Conditions:
- It must be a home or building you bought yourself or received via a gift. In the case of inherited property, no tax is payable.
- You are taxed on capital gains only if you sell the property within five years of purchase. In the case of gifts, you pay tax if you sell within three years of the gift. In the case of construction land on which a building is erected, construction works must start within five years of acquiring the land and the building must be sold within five years of being occupied or leased.
