Transfer of immovable property

When selling or exchanging land, house or apartment, the question arises – whether income tax is payable on the gains received. If so, how and when to declare the gains and how the tax amount is calculated. You can find answers to these questions in the following guide.

Handbook

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Transfer of property restituted after being unlawfully expropriated

Income tax is not charged on the gain received from the transfer of an immovable, if the essential part of the immovable or the object of apartment ownership or a right of superficies is a dwelling and the immovable has been transferred to the taxpayer’s ownership through restitution of unlawfully expropriated property (for example, a house that was returned as a movable and registered and transferred as an immovable).

If a person has been restituted a plot of land larger than the part of the right of claim, then the income from the sale of this plot of land is also exempt from tax.

However, gains from the transfer of standing crop of the restituted forest land is taxed with income tax.

Transfer of property restituted after being unlawfully expropriated if...

...the property is inherited

In the case of inheritance, it is legal succession arising from the law and the tax exemption can be used by the person who transfers the land for the first time. If the owner of the property restituted after being unlawfully expropriated bequeaths the property to a successor and the successor transfers it, he or she does not have to pay income tax on the gains received.

...the property is received as a gift

Gifting is a transfer transaction and the tax exemption cannot be used upon transfer of property, which has been restituted after being unlawfully expropriated and received as a gift. If the owner of property restituted after being unlawfully expropriated gives this property as a gift and the recipient of the gift sells it, then he or she must pay income tax on the gain received.

...the property is received as a legacy

If the property restituted after being unlawfully expropriated 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: 23.08.2022

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 of 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
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 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 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

§ 15 (5) 3)

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 the tax exemption is not passed on, gains are taxed

Summer cottage or garden house

§ 15 (5) 4)

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 conditions are met, then sale is exempt from tax the tax exemption is not passed on, if conditions are met, then sale is exempt from tax

Last updated: 24.08.2022

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