If a taxpayer sells a property that they acquired for consideration less than ten years ago and have used for their own residential purposes since then, they do not have to pay tax on the capital gain even if they rented out the property for a short period in the year of the sale. This was confirmed by the BFH in its judgement of 03.09.2019 (Ref. IX R 10/19 ) decided.
In the case in dispute, the plaintiff had purchased a condominium in 2006, which he used continuously for his own residential purposes until he moved out in April 2014 and sold it in December 2014. From May 2014 until the sale in December 2014, he rented out the flat. The tax office considered this to be a private sale transaction and calculated a taxable profit from the sale within the meaning of Section 23 EStG. § Section 23 EStG.
The BFH took a different view and ruled in favour of the claimant. In the opinion of the BFH, the "interim letting" from May 2014 to December 2014 was not harmless, as the flat was used for own residential purposes (2nd alternative) in the year of the sale and in the two preceding years. Tax exemption therefore applies, among other things, if the property is used for own residential purposes for a continuous period of one year and two days prior to the sale; the use for own residential purposes must extend over the entire middle calendar year, while the residential use in the second year prior to the sale and in the year of sale need only comprise one day each.
