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WIKI

Existing property

SHORT DESCRIPTION

A property that was completely built and has been used for some time is called an existing property. It differs from a new-build property in that it is much older. But even a newly built property becomes an existing property over time.

IN DETAIL

The life cycle of a property divides a real estate project into the phases of planning, realisation, use and exploitation. While the planning and construction of the property take place in the first two phases, the utilisation phase describes the main life cycle of a property, in which a newly built property becomes an existing property. This is because a large part of the total life cycle costs is invested here, as existing properties in particular have to be renovated and modernised due to wear and tear. The utilisation phase is followed by the realisation phase, in which the property can either be demolished or revitalised.

Especially for small investors with little capital, existing properties can be worthwhile. This is because their purchase price is often lower than that of newly built properties. Furthermore, the sales price of the former can rise quickly in times of real estate boom, provided the property is in a good location and condition. Most properties near or in the city centre are existing properties and are therefore particularly attractive because they have a good infrastructure. From a tax perspective, investors can benefit from the so-called speculation period: This stipulates that private individuals do not have to pay tax on the capital gain of the property if it is only sold after ten years. If it was used privately in the year of sale and in the two years prior to that, the capital gain is always tax-free. Commercial persons, on the other hand, must always pay tax on the gain on the sale.

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