Complicated property situation

Good day,

I am currently in purchase negotiations for one or several plots of land. Actually, I only need two of them, but because the owner wants to sell the plots only as a package, I am forced to accept this deal. I would sell the two plots I do not need again after the purchase without incurring a loss. How should my financing look? Partially variable loan? Do I have a tax issue? Am I allowed to sell the land even though it is financed by a loan? Do I have to include any special conditions in the purchase contract, that is, specify an individual purchase price for each plot?

Thank you very much for your assessments.

Best regards, Martin

I would conclude a purchase contract listing all properties with individual prices. Financing then as you need it - variable or with a very short term for the sales properties and correspondingly long-term for the properties you keep (preferably together with the construction financing, if you are already that far). You will not have any tax problems yet, as you are not yet considered a commercial trader. However, you have the problem that you MUST pay real estate transfer tax + notary fees, even though you resell two properties immediately. If you make a profit from it, speculation tax applies. To be on the safe side, do not rely on our layman statements, but seek the advice of a tax advisor.

Hi,
you are allowed to resell the properties at cost price, i.e. property price + real estate transfer tax + notary = new property price. Everything beyond that is subject to capital gains tax.
You are allowed to buy and resell 3 properties within 5 years. On the fourth one, you become a commercial trader, and completely different rules apply.

Best regards,

Andreas

As a layperson, I would first ask myself why the properties are only available as a package and, above all, whether the properties actually already exist or still need to be subdivided!? Or reduce the price for the unwanted properties by at least 20% so that after deducting your time and financial efforts for resale, there is still something left.

At least to me, this sounds strange at first because the seller's approach suggests that the properties are not in high demand. If that is the case, one has to ask why that might be.

Best regards Dirk Grafe