January 01, 2024
1. General rule
Taxable income is also considered to be income that a taxpayer (a natural person who is not in the corporate income tax system) from the alienation of real estate and property rights. Alienation is considered sale, replacement and other transfer. Income is the difference between the receipt determined by the market value of the real estate or the property right to be disposed of and the purchase value increased by the increase in producer prices of industrial products. Disposal costs can be deducted as expenditure.
2. Exemption from taxation
Income from the alienation of real estate shall not be taxed:
- if the property was used for housing for the taxpayer or dependents of his immediate family;
- in the case if the property or property right was disposed of after two years from the date of procurement.
3. Special rule
The rule to be particularly careful is as follows:
- Income from the alienation of real estate and property rights shall be taxed if more than three properties of the same type or more than three property rights of the same type have been stolen for a period of five years from the date of acquisition of real estate or property rights, unless the real estate is authorized under a special law and if land with an individual area of up to 250 m2 is alienated, and a total of 1000 m2.
- If a building with several apartments or business premises or building land or several plots of land is alienated, any apartment, business premises, construction site or land plot is considered to be one property.
In the above cases, income is the difference between the total amount of receipt determined by the market value of real estate or property rights that are alienated over a period of five years and their purchase value plus the growth of producer prices of industrial products and for investment costs for which the taxpayer holds authentic documents.
4. Exception to a special rule
Income from the alienation of real estate and property rights is not taxed if the alienation is carried out between spouses and relatives in the front line and other members of the immediate family and between divorced spouses if the alienation is directly related to divorce and inheritance of real estate and property rights.
5. Taxation of donations
If the real estate was acquired by donating and alienated within two years from the date of its procurement by the donor, the alienator is determined income from property and property rights. In the case of acquisition of real estate by donating, the day of purchase of the property is considered to be the day of purchase of the donor, and the purchase value is made by the market value at the time of purchase. In this case, income will be determined as the difference between the receipt determined according to the market value of the real estate or the property right to be disposed of and the purchase value increased by the increase in the producer prices of industrial products. Disposal costs can be deducted as expenditure.
If real estate and property rights are acquired through donations and alienated within five years from the date of their procurement by the donor, the donor is determined income from property and property rights in such a way that the income forms the difference between the total amount of receipt determined according to the market value of real estate or property rights that are alienated over a period of five years and their purchase value increased by the growth of producer prices of industrial products and investment costs for which the taxpayer possesses authentic documents.
6. Recognition of tax losses
Losses from the alienation of real estate and property rights can only be deducted from income from the alienation of real estate and property rights that was realized in the same calendar year. Losses from the alienation of real estate and property rights are reported up to the level of the tax base.
Taxpayers who realize losses from the alienation of real estate and property rights may, for the purpose of recognizing them, submit an annual report to the Tax Administration showing the total amount of income realized and the total amount of losses realized on the last day of the year for which the report is submitted, within 15 days from the date of expiry of the year for which the report is submitted.
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