When a property is sold by a private individual, the most significant costs include personal income tax, which is payable to the tax authorities on the proceeds of the sale.
If the property is sold for a higher price than the purchase price, the sale will give rise to taxable income and in this case the personal income tax payable on the sale of the property will, as a general rule, be 15% of the income. In the event that the purchase price of the property does not exceed or is lower than the sale price, no personal income tax liability will arise. In addition to the difference between the two prices, however, there are two other factors that affect how much tax will be due.
- the time elapsed between the purchase and the sale, because after 5 years the sale will be tax-free, and within this period tax will be payable in bands.
- the other is the cost or expense, including the cost of selling the property, which can be supported by an invoice. These costs reduce the profit.
Taking these adjustments into account, it is possible that no tax liability will arise after the sale of the property.
