Do you sell second-hand clothes, household goods or other property?

The instructions below are for circumstances where you have sold used household items that you or the members of your family had owned. This kind of selling might take place in a flea market, through an online app, or otherwise. Selling ordinary household goods is often exempt from taxes if you or your family had used them. However, you may have to pay tax if your capital gains exceed a certain limit or if the goods you sold are not household goods. 

If you sell recycled materials including scrap metal, it may give rise to a liability to pay tax as well. To have the liability for paying tax depends on what you are selling – whether they are ordinary household goods or other items.

Did you sell ordinary household goods that you or your family had used?

You can sell your own or your family members’ ordinary household goods tax-free if, at the end of the calendar year, the capital gains you receive are no more than €5,000. The term “capital gains” means the difference between the selling price and the purchase price. 

Ordinary household goods include articles of clothing, cookware, jewellery, furniture, home electronics, supplies for various hobbies, sports, or recreational equipment, and – provided that your family members had used them previously – old pieces of gold jewellery and old gold rings.

You must be able to present proof of both the purchase price and the selling price when you have sold any of the above. However, if the selling only results in max. €5,000 of revenues per one calendar year, it is clear that the sales are deemed tax-exempt even if you are unable to give full details on the purchase prices. In the event that you sell more and the capital gains go over the threshold of €5,000/year, there will be a capital gains tax on the amount above €5,000. 

Example: Betty bought a set of tea and coffee cups for €750. Some time later, she sold the set for €3,000. Selling price: €3000 Purchase price: €750 Capital gain: €2250 Because Betty’s sales activity resulted in less than €5,000 in capital gains and the items were ordinary household goods, Betty will not have to pay a capital-gains tax.

Selling a motor vehicle, boat or other comparable property

The following used items are not considered as ordinary household goods and therefore the 5000-euro threshold on capital gains does not apply.

Cars, motorcycles, boats and similar means of transportation that you or your family have used and owned: In addition to the above, when capital gains are received from the sale of the following types of assets, tax must be paid:

• valuable paintings and works of art,
• gold bars which you had purchased for investing in gold, other items that you have owned for an investment purpose,
• corporate shares which you had purchased for a leisure or hobby purpose, such as shares in a golf course company.

The calendar year’s selling is below €1,000

If you sell items that are not deemed as ordinary household goods, you will pay tax on the capital gains if the total of the prices you receive is more than €1,000 by the end of the calendar year. The threshold of €1,000 concerns selling prices, not the capital gains you may have made. If €1,000 is exceeded, you need to pay capital-gains tax relating to all the sales of these goods.

However, your sale would only bring a taxable capital gain when the selling price is higher than the sum of the purchase price and expenses you needed to pay when selling.  The applicable tax rate is the capital income tax rate: Up to €30,000 of capital gains, the rate is 30% but if you received more, the excess above €30,000 will be taxed at 34%. 

Example: Jack purchased a classic car for €14,000. After the purchase, he spent €1,500 to restore the car. Some time later, he sold it for €21,000. The amount of capital gains is €5,500 (selling price €21,000 – cost of acquisition €14,000 – cost of the restoration work €1,500). When submitting his tax return for the year, Jack will declare this amount as his capital gains.

Example: You receive a scrappage bonus of €2,500 for your used vehicle. You bought the vehicle several years ago for €4,500. Because the acquisition cost was higher than the bonus, there is neither a capital gain nor taxable income.

Deducting losses

The following types of capital loss are non-deductible losses:

• You sell some household effects and make a loss.
• You sell your car and make a loss.
• You make a loss when selling your boat, or  
• other property and assets you had used personally.

Did you sell any of your ordinary household goods in a real estate transaction? 

When you sell a house, apartment or other immovable property and the selling price includes furniture or other household goods, the selling price of the house must be kept apart from the selling price of the furniture, household goods and the like. Attach a list of household goods to the deed of sale. Both you and the buyer should sign the list. This is a document that lists the movable property sold, including dates of purchase and fair market values valid at the time of the sale. Use the actual second-hand value of every item. In other words, do not use the price of a new replacement item or the original purchase prices of the household goods. It is also required that the values on your list should not be simple estimates.  You do not need to enclose the list of household goods with your tax return. We may ask you to provide the list if necessary.

Capital gains on the sale of ordinary household goods are taxable if the threshold of €5,000 is exceeded. Any capital gains arising from sales of personal property belonging to different individuals in your household must be calculated separately for each individual who had owned the property.

What property of the house or apartment cannot be sold as household goods?

Not all goods in a house or apartment are regarded as household goods. You cannot sell fixtures and fittings separately. Fixtures and fittings are part of the house, real estate, or apartment, and are included in the selling price.

Fixtures are items permanently attached to the house or apartment, etc. that cannot be removed without leaving a mark. Examples include wardrobes, kitchen furniture, bathroom furniture, railings, and trees and shrubs in the garden.

In general, fittings are part of the intended use of the house, apartment or other real estate. Examples of fittings are refrigerators, freezers, venetian blinds, outdoor drying racks and letterboxes.

Read more about the selling of immovable property.

How to file

Over the course of the calendar year, if you have sold

• some ordinary household goods and made a capital gain higher than €5,000 or
• movable property that you or your family had owned and used, and the total revenue exceeds €1,000 and you made a capital gain,

you must declare the sale on your pre-completed tax return in MyTax, under Capital gains.

Go to MyTax

Read more about the tax return and its deadline dates

I you do not have access to MyTax, please provide the information on paper, on Form 9 — Capital gain or capital loss.

Have you sold goods through an application or a website? The Tax Administration receives information on income that you gain through digital platforms both from Finland and from abroad. The Tax Administration also controls that the information is reported for tax assessment. Remember to report the profits on your pre-completed tax return. Read more about profits gained through digital platforms.

Selling self-made products

When you sell something you have made yourself, such as a knitted sweater, the money you receive for it is income subject to tax. You can deduct the expenses incurred from the production of the self-made products such as the cost of the yarn or other materials and supplies.  

This type of income must be declared under Other earned income on your tax return. To claim the cost of the yarn and other tax-deductible expenses for the production of income, go to Other deductions on the tax return in MyTax. First select Expenses for the production of income, and then Expenses for the production of other income than wage income.

Is your sales activity continuous and has the characteristics of a professional activity? 

Continuous and professional selling of goods is, for tax purposes, treated as business activity. Normally, such activity is about selling new products, own manufacturing, or buying and selling second-hand goods.

However, to sell second-hand goods occasionally is not deemed as business activity.

One of the key characteristics of an operation of business is that the person’s objective is to earn an income from it. If new or used goods are being purchased and sold regularly and with a view to earning an income, any capital gains accrued are taxable business income. File the Business tax return (Form 5) to declare the income.

The liability to pay value-added tax

You the seller must submit an application for VAT registration if your turnover exceeds the threshold of small-scale operations in VAT taxation (€20,000). 

Read more about the liability for paying VAT and registration for VAT