Construction on someone else's property with subsequent purchase

Is it even clarified whether the profit has to be taxed as income at all? There is no speculation tax, after all.

Unfortunately, there is indeed a speculation tax for real estate. More precisely, it is actually a tax on private sales transactions, which is regulated in § 23 of the Income Tax Act (Einkommensteuergesetz). And since a pure property cannot be used for personal purposes, the 10-year period must always be observed.

Unfortunately, there is indeed the speculation tax on properties. More precisely, it is actually a tax on private sales transactions, which is regulated in § 23 Income Tax Act (Einkommensteuergesetz). And since a pure piece of land cannot be used by oneself, the 10-year rule always applies.

You have to pay income tax on the profit at your personal tax rate, and the date of acquisition counts. That means if the neighbor is a retiree and the 80,000 euros are spread over 4 years, almost nothing is due. A property can also be used by oneself, as a community garden, weekend property, especially if the house is dilapidated.

A plot of land can also be used personally, as a allotment garden, weekend plot, especially if the house is dilapidated

Unfortunately, a pure plot of land cannot. This has already been decided by the highest court.

It looks different with a house on it. But the dilapidated "second house," which is not registered as a second residence, must first be approved by the tax office.

I even believe that speculation tax must always be paid on undeveloped plots of land, regardless of whether 10 years have passed or not. If this were the case here, it would even be better for the buyers - the timing of the sale would then not matter to the seller.

So, here we are again. We have had further contact with our acquaintance and she might possibly agree to an early sale after all. As suspected, the reluctance also stems from the fact that she does not want to "gift" unnecessary money to the state or unnecessarily give any of the relatively small profit to the state. Now, during the conversation, questions arose as to how one can reduce the speculation tax themselves.

We have already researched and the following points are apparently deductible from the profit as additional costs (for the seller, in addition to the original purchase price) when selling to us:

[*]Notary (original costs for purchase and for sale?)
[*]Real estate transfer tax
[*]Land register entry
[*]Experts (there may have been something back then, still needs to be clarified)
[*]Valuation report (there may have been something back then, still needs to be clarified – do soil reports also count here?)

Now, there is an old, quite dilapidated bungalow on the property, which definitely has to go. If our acquaintance were to demolish it and dispose of the rubble/waste before selling to us, would these also be costs deductible from the profit? Unfortunately, we could not find anything conclusive on this. The same applies, for example, to new fences which she has purchased and installed.

Another point would be the mentioned surveying and subdivision to straighten the interlocking property boundary. Would the surveying and subdivision be deductible from the profit? (It is done explicitly for the sale, since otherwise there would be a small shed on the interlocking property boundary.)

does not want to "gift" unnecessary money to the state ...
Now, there is an old, quite dilapidated bungalow on the property, which definitely needs to be removed. If our acquaintance were to demolish it and have the debris/waste disposed of before selling it to us, would these also be costs to be deducted from the profit?

correct

from a tax perspective, however, it would be more sensible to reduce the purchase price by the demolition costs

--> if the sale takes place AFTER the demolition and is therefore (nominally) more expensive, real estate transfer tax will also be due on this partial amount ... and the basis for calculating the notary fees will also increase ...