In accordance with art. 10 paragraph 1 point 8 of the Personal Income Tax Act, the sale of real estate after 5 tax years on the purchase / construction of real estate is not a source of income, and therefore is not subject to income tax. This rule is relatively simple. Interpretation problems arise, however, when the spouses acquired the property jointly, and after divorce, as a result of the division of property, it was granted to one of them. In this case, can you sell without tax after 5 years of acquisition with your spouse or from „acquisition to personal property” – after the division of property.
The above doubts were dispelled by the Director of the National Treasury Information by issuing an individual tax decision of August 6, 2019 No. 0115-KDIT2-1.4011.224.2019.1.DW. It was stated there that the date of purchase referred to in art. 10 paragraph 1 point 8 of the Personal Income Tax Act is the acquisition of joint property of the spouses.
The authority referred to art. 10 paragraph 6 of the Personal Income Tax Act, stating that in the event of a paid sale after termination of matrimonial property joint property, which was acquired or built during this community, the period of 5 years is counted from the end of the calendar year in which the property was acquired to joint property of the spouses or their construction during the marriage joint property.
It should be remembered that the above rules apply only in the case of the sale of real estate which was not carried out in the course of business activity. If we bought the property only for profit (and did not serve us for the purposes of new housing) or if we make many transactions of this type in a relatively short time, the Tax Office may consider that we conduct business in this area. In this case, the „five year rule” will not apply and we will be subject to income tax.