If land is sold that the owner has owned for less than ten years, the profit is usually taxed. However, if there is a property on the property that is occupied by the owner himself, the situation is different: then no taxes are due on sale - even if it is a garden house that is permanently occupied in violation of building law. The Federal Fiscal Court (BFH) came to this conclusion.
In the present case, the owner lived in a garden shed on an allotment site and sold the land on it within the ten-year period. The erection of the garden house was only approved under the condition that the building may not be used for permanent residence. When selling, the tax office and the tax court therefore demanded income tax on the profit. The owner then sued.
The BFH was right. Because the legal feature "use for own residential purposes" requires, among other things, that a property is actually permanently suitable for living in. This mainly affects the condition of the building. A use contrary to building law could therefore also be favoured. In its decision, the BFH goes into the fact that "the norm [...] of preventing the unjustified taxation of a capital gain when giving up residence, e.g. B. because of a job change [serves]”. This is just as fulfilled in the case of the use of residential property in violation of building law as in the case of use that complies with building law.
Source: IX R 5/21/bundesfinanzhof.de
© Fotolia
