Real estate for sale

Real estate for sale

 

Question:
Hello!

When selling real estate - a building acquired four years ago, registered with a book value, with a given book value at the moment. The tax assessment of the property is lower than the market assessment by an independent appraiser. The sale is not between related parties. My question is: can we sell the property at book value or in your opinion which of all the listed values is the most authoritative for determining the tax base for sale? Should an adjustment be made for the tax credit used?

Thanks!

 

Answer:

Hello,

You would have to make an adjustment to the tax credit used if the property being sold falls within the definition of an "old building" and you take advantage of the possibility of Art. 45 of the VAT Act, the sale to be a tax-free transaction. In this case you will have to make an adjustment according to Art. 79 of the VAT Act. If the sale will be a taxable supply, there will be no need to adjust the tax credit used.

Regarding your question about the sale price, we will answer you as follows. The tax base of the transaction is the sale price plus the costs incurred under the transaction itself. If you ask us at what price to sell the building, our answer is - at what price you find a buyer. The fact that the deal is not between related parties does not mean that the sale at times below market value would be viewed favorably by the NRA authorities.

We hope we have been helpful.

Greetings!