Valuation of farmland for development into building land

And the tax office also wants half of the sale proceeds.

In our neighborhood, some deals with the city have failed (right of first refusal) and they wait until expropriation.
The farmer often does not get rich from it.

And the tax office also wants half of the sales proceeds.

I assume that the OP did not buy the property as a speculative object in the last 10 years. After 10 years, the sale is tax-free; before that, the tax office does not want half, by the way, but applies your individual tax rate.

I assume that the OP did not buy the property as a speculative object in the last 10 years. After 10 years, the sale is tax-free,

Regularly, the farmland was not purchased but inherited. If no declaration of business cessation has been submitted to the tax office for the possibly dormant agricultural operation for years, then a sale is fully taxable. There have already been one or two problems in our town, and the following selling generation was very surprised by the letter from the tax office.

regularly, the farmland has not been acquired but inherited. If the tax office has not yet been given a declaration of cessation of business for the agricultural operation, which may have been dormant for years, then a sale is fully taxable.

Is that so? As far as I know, the issue is rather the separation between business and private assets. In the case of inheritance, the holding periods of the decedent are credited - if it was already in private assets there, it helps the heir. Otherwise, - unless the heir continues the agricultural operation - it transfers to private assets and the 10-year period begins.

Numbers and facts from me from 2013. Our family owns farmland on a gentle slope. Leased out for next to nothing. Not worth mentioning. The municipality wants to designate it as a building area. In the first section about 35 plots. Partly sold through the municipality, partly through an investor. Long discussions, complaining neighbors, eco-activists, etc. Later we all agreed. In the end, we sold for 68 euros per sqm. Selling price after development by municipality and investor was 295 euros in the first construction phase. In the second construction phase then for 340 euros. The last construction phase is coming up in 2023 with prices around 450 euros. About 47% of the gross area was actually sold in the end. The rest were streets, green spaces, rain basins, playgrounds, etc.

Without the involvement of the municipality, especially in the above-mentioned public areas, the investor would NOT have bought more.

Is that so? To my knowledge, the separation between business and private assets is more the issue.

The distinction between private assets and business assets is crucial. But without an official declaration of abandonment, leased farmland remains business assets of the agricultural and forestry operation even after generations. That’s why there is Section 16 paragraph 3b of the Income Tax Act. So it can sometimes really be a nasty surprise :/