Two years of ownership is the line between 5% and nothing

Residential property owned for more than two years is fully exempt when sold; sold inside two years, the gain is taxed at 5%. For an owner weighing whether to sell now or wait, that makes the purchase date on the title the single most consequential fact in the file. If the two-year mark is a few months away and the market is not running away from you, the arithmetic of waiting is usually simple — 5% of the gain against a few months of holding costs. It is worth checking the exact registration date rather than relying on memory of when the deal was agreed.

The Ministry of Finance issued Public Ruling No. 143 on 14 May 2026, clarifying how income tax applies to individuals selling property and other assets. The change that matters most to owners is on the cost side: documented spending that directly increased the property's value, such as renovation or construction, can now be counted into the purchase price when the gain is worked out. Previously such costs were generally not taken into account. For anyone who gutted and rebuilt a flat before selling inside the two-year window, that is the difference between being taxed on the whole uplift and being taxed on the part of it you did not pay for. Keep the invoices.

The relief is written for owners, not for traders. Property development, real estate trading and other organised, continuing business sales of property fall outside it, so neither the exemption nor the reduced rate reaches them. The ruling also sets out what makes a unit residential in the first place: a separately identifiable registered unit, designed for residential use, capable of connection to basic utilities, and not structurally part of a non-residential operation. Unfinished property can still qualify where the project designates it as residential and the essential ownership rights pass to the buyer. Renting the flat out before selling does not by itself cost you the exemption, unless the pattern of activity is systematic flipping.

Transfers inside a family carry their own arithmetic. Property inherited or received as a gift from a first-degree relative is generally tax-free, and the previous owner's holding period can be added to the recipient's — which can put the new owner past the two-year mark sooner than the transfer date suggests. Where cadastral units are split, ownership time for the new units runs from when the original property was first owned. Where units are merged, each part is assessed separately, so a part held for less than two years is not swept into the exemption by sitting next to an older one. Any of these cases is worth putting to a tax adviser with the registry extract in hand rather than reasoning from the general rule.