You want to sell your German commercial building and cut back professionally or stop working. An acquaintance points to a tax allowance for older entrepreneurs. Whether this hint applies to your case is not decided solely by your date of birth and the property contract. First it must be clear what will happen to the business as a whole.
Describe the building sale within the overall business context
§ 16 EStG distinguishes, among other things, the disposal of the entire commercial enterprise or a branch of the enterprise as well as other participation transactions mentioned there. Paragraph 3 deals with the cessation of the commercial enterprise. [ESTG-16] An isolated property sale is not already classified as one of these transactions by the personal word “retirement”.
Our editorial recommendation: Set out remaining activities, other assets and planned steps. Will someone else continue the business? Is only a change of location intended? Do essential activities or asset positions remain with you? Advice needs the actual plan.
Link a possible allowance to its prerequisites
Paragraph 4 names, among other things, reaching the age of 55 or permanent occupational disability in the social security sense, an application, the one‑time granting and a reduction of the allowance depending on profit. [ESTG-16]
The contribution does not calculate a personal entitlement and does not treat these prerequisites as a complete examination of all benefits. In particular, no blanket tax exemption of any property sale above a certain age is promised. The classification of the transaction must precede.
An invented new workshop location
An entrepreneur sells his previous workshop building. His orders and machines remain; he initially wishes to continue working in smaller rented premises. Privately he already calls this his transition into retirement.
He informs his tax advisory of the actual continued business and has the sale classified accordingly. Private life planning is important information but does not replace an assessment of the business transaction. The example does not conclusively determine either a cessation of the business or the opposite.
Examine different transitional steps together
If buildings, other assets and participations are to be transferred at different times, the entire intended sequence is presented. The article names no general harmless time span. One partial transaction is not labelled appropriately in isolation while the remaining steps disappear in another file.
Also have explained which values and which costs are needed for the actually relevant profit calculation. A receipt into the sale account and the repayment of a loan alone do not constitute a complete tax accounting of the business exit.
Include the result in the decision
After the examination you will know which transaction is present, which personal prerequisite is actually relevant and what funding requirement remains after the sale. If the continuation of the business changes, this change is reported afterwards. This way the planned retirement can be planned with a concrete tax basis, without incorporating a general age rule as an already certain benefit.