When do you not have to pay property sales tax? Beware of the new conditions

Selling a property can raise a decent amount of money in today's market. However, this amount is also subject to income tax, which can easily run into hundreds of thousands of crowns. Fortunately, the law sometimes allows this income to be exempt from tax. We have written down the conditions you need to meet.

Basic criteria: length of ownership

Are you hesitant about when income from the sale of a house or flat is tax-free? For example, if you are selling a property that you have lived in for more than 2 years. Another case is the sale of a property that you have owned for more than 10 years (5 years for properties acquired before 2020). This is dealt with in detail in the Income Tax Act. It has recently been amended to tighten the conditions.

What about other properties?

The new law sets out two criteria that allow you to exempt income from the sale of a family house or apartment unit from tax, even if you have owned it for less than the aforementioned 2 years (or 10/5 years). It is necessary to meet both conditions at the same time.

You must:

  • use the money to "provide for your own housing needs", i.e. to buy a house, land or flat, or to build a new house.
  • inform the tax authorities of this income by the end of the deadline for filing the tax return for the tax year in which the funds were received.

The exemption is only available for real estate owned by an individual, so the house or apartment must not be part of the company's business assets.

In connection with the new notification obligation, the General Tax Directorate has published a new, optional form (No. 25 5259) entitled Notification of the acquisition of funds that will be or have been used to acquire one's own housing needs (the notification can also be made by a general letter). The document can be downloaded from the website of the tax office. More detailed information on the amendment can also be found in the notice on the website of the Tax Administration.

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