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 returned in the course of the ownership reform

Gains derived from the first transfer of property returned in the course of the ownership reform (incl. returned forest land), is exempt from income tax. This is also the case if the property (plot of land) is divided into several parts and transferred as separate plots.

NB! However, gains from the transfer of standing crop of the returned forest land is taxed.

Transfer of property returned in the course of the ownership reform, if...

...the land 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 returned in the course of the ownership reform for the first time.
If the owner of the property returned in the course of the ownership reform 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 land is received as a gift

Gifting is a transfer transaction and the tax exemption cannot be used upon transfer of land returned in the course of the ownership reform, which has been received as a gift.
If the owner of the land returned in the course of the ownership reform gives the land away as a gift and the recipient of the gift transfers it, then income tax must be paid on the gains received.

...the land is received as a legacy

If the property returned in the course of the ownership reform 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 immovable property returned in the course of ownership reform, income tax must be paid 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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