Income from the sale of property owned for less than 5 years is subject to income tax

Profit from the sale of real estate is subject to 19% tax (the first approx. EUR 37,000 in a given year), then 25% (each additional euro over EUR 37,000). The seller settles tax in his/her tax return.

Profit is also subject to health insurance of 14%. This insurance is taken out by the health insurance company on the basis of an annual settlement by 30 June of the year following the year in which the property was sold. Health insurance can be included in tax expenses either for the year in which levied (if the taxpayer achieved sufficient taxable income) or in the supplementary tax return for the year in which the property was sold.

So if the seller has achieved, in addition to income from the sale of real estate, other income (e.g. from employment) of at least EUR 37,000, the profit from the sale of real estate will be subject to total tax and levy of 35.5%.

Net profit from the sale:
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Sales tax base
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Income tax*:
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Health insurance**:
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Effective tax and levy rate***:
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* The tax calculation only takes into account income from the sale of real estate. The tax burden may be different if the seller has other income in the year of property sale, e.g. from employment. If these other revenues are higher than EUR 37,000, then the profit from the sale of real estate will be subject to an effective tax burden of 35.5%.

** Health insurance is only paid in the year following the year of property sale, and is subsequently taken into account in the tax calculation as an additional tax return.

*** The tax calculation is only for the seller’s general guidance. We recommend consulting a tax advisor on the resulting tax liability.

Disclaimer

The above commentary and tax calculator are only intended for the seller’s general guidance. Occam Real Estate, s.r.o. does not bear any responsibility for the quantification of the seller's tax liability. We recommend that the seller consult a tax advisor for the final calculation of tax liability.

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