It is peak season for holiday home sales.
The number of for sale signs around the country is at its highest in almost four years.
And some of those who succeed in getting the summer house sold come out of the deal with a profit.
But this kind of gains are – contrary to what many people think – not automatically tax-free.
Nordjyske recently told how a special group of holiday home owners often end up in an unexpected tax trap when the holiday home is sold.
These are those where the summer house plot itself is 1400 square meters or more.
Here, the house can only be resold tax-free if the seller can document that it is impossible to subdivide an area from the plot, or that, according to the Valuation Agency, a subdivision would reduce the value of the remaining area or the summer house by more than 20 percent.
Many people are not aware of this requirement. And it can be expensive.
But the requirement for the size of the plot is not the only thing that you as a summer house seller have to be aware of.
Another tax trap
Because requirement number two for a tax-free holiday home sale – namely that the holiday home has been used as a holiday home by the owner and/or his household for all or part of the ownership period – is not quite as simple as it sounds.
There are also examples here of the tax trap working.
One of the things that the tax authorities look at, among other things, is how long you have owned your holiday home. If you sell the holiday home at a large profit following a short period of ownership, you risk a tax bill.
This happened, among other things, in a judgment from 2012, when a carpenter was considered liable for tax on a gain of around DKK 450,000 on a newly built summer house, which he sold half a year following it was completed.
– The fact that the house had been used privately during the short period of ownership was irrelevant, as it was built with a view to sale, writes the audit firm BDO regarding the verdict.
Intensive rental
If you own several holiday homes, some of which have been used for letting, Tax is also on guard.
Greater requirements are then placed on the documentation for the private use of the summer house, and even if you can present just that documentation, it does not equate to tax exemption.
In a judgment from 2010, a summer house owner was thus considered liable for tax on a profit of a small 400,000 kroner on a summer house, which he sold following an ownership period of almost 17 years.
– The summer house had undoubtedly been used privately, but not as much as another and much larger summer house that he also owned. The court assumed that, despite the long period of ownership, the summer house was primarily bought with a view to letting, and that it was the large summer house that had actually constituted the family’s holiday home, BDO explains.
The tax authorities also do not automatically accept a tax-free sale if, for example, you can only document that your holiday home has been used for a single summer holiday.
More is needed, but there is no requirement for an exact number of days. Whether the requirement is met depends on a specific assessment.
also read
Now billions are rolling back to the home owners. These northerners can rejoice
2024-05-13 04:00:23
#Carpenter #sold #newly #built #summer #house #tax #trap #clicked
