Handbook “Transfer of immovable property”
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Transfer of property privatised with the right of pre-emption
Gains from the transfer of immovable property are not subject to income tax if the essential part of the immovable or the object of apartment ownership or the right of superficies is a dwelling and all the following three conditions are met:
- the dwelling has been transferred to the taxpayer’s ownership through privatisation with the right of pre-emption
- the land adjacent to the dwelling has been transferred to the taxpayer’s ownership through privatisation with the right of pre-emption
- the size of the registered immovable property does not exceed 2 hectares.
EXAMPLE
The dwelling house was inherited; 0.6 hectares of land was privatised with the right of pre-emption, and the owner did not use the house as a residence.
The total costs related to the inheritance process and improving or upgrading the dwelling were 19,670 euros.
The costs of privatising the land with the right of pre-emption were 1,800 euros. The registered immovable was sold for 70,000 euros.
Taxable income is calculated as follows: 70,000 – 19,670 – 1,800 = 48,530 euros.
Since one of the above-mentioned conditions is not met in this example (the dwelling is not privatised with the right of pre-emption), the income tax exemption cannot be applied and the income received is taxed.
Transfer of property restituted after being unlawfully expropriated if...
...the property is inherited
If a person inherits and transfers a property privatised with the right of pre-emption, he or she cannot benefit from the tax incentive and income tax is payable on the gains received, unless he or she used the property (dwelling) as his or her place of residence. 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 property is received as a gift
Gifting is a transfer transaction and the tax exemption cannot be used upon transfer of property privatised with the right of pre-emption and received as a gift. If the owner of such property gives this property as a gift and the recipient of the gift transfers it, then he or she must pay income tax on the gains received.
...the property is received as a legacy
If the property privatised with the right of pre-emption has been obtained by a contract for the transfer of a legacy, it is deemed to be the first transfer transaction. If the legatee transfers the property, he or she must pay income tax on the gains received.
Last updated on 08.01.2025
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 for 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 (is not a successor) |
To a legatee (is a successor) |
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 successor's tax exemption applies | 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 successor's tax exemption applies | 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 |
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 | gains are taxed | the tax exemption is not passed on, gains are taxed |
| Summer cottage or garden house |
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 the conditions are met, the sale is exempt from tax | the tax exemption is not passed on; if the conditions are met, the sale is exempt from tax | |
| Expropriation on the basis of the Acquisition of Immovables in Public Interest Act | § 15 (4) 3) | sale is exempt from tax |
This table provides a quick overview of real estate transactions that are taxable (including, under certain conditions or in the absence of the required condition, taxable).
| Object of the contract of purchase and sale | Basis for taxation | Calculation of gains |
|---|---|---|
| Garage | § 15 (1) |
the difference between the acquisition cost and the sales price of the sold property |
| Land (agricultural or forest land) | § 15 (1) |
the difference between the acquisition cost and the sales price of the sold property |
| Real estate |
is not the residence and/or has sold the residence in less than two years |
the difference between the acquisition cost and the sales price of the sold property |
| Immovable property privatised with the right of pre-emption and the essential part of which is a dwelling |
there is no dwelling and/or land belonging to it has not been privatised with a right of pre-emption and/or the size of the registered immovable exceeds 2 hectares |
the difference between the acquisition cost and the sales price of the sold property |
| Storage space |
selling in a separate transaction from dwelling |
the difference between the acquisition cost and the sales price of the sold property |
| Parking spot |
selling in a separate transaction from dwelling |
the difference between the acquisition cost and the sales price of the sold property |
| Summer cottage or garden house |
not entered in the register of construction works or the land register, the summer cottage or garden house and/or owned by a person for less than 2 years and/or the size of the registered immovable exceeds 0.25 hectares |
the difference between the acquisition cost and the sales price of the sold property |
Last updated: 25.02.2026