In the case of a real estate inheritance, there is the possibility of a tax exemption under certain conditions if the heir uses the property for self-residential purposes. In the case at hand (AZ 3 K 3184/17), the owner of a semi-detached house was left the other, adjacent half of the house after the passing away of his father in 2013. The owner is the sole heir of the semi-detached house. He plans to combine the two halves of the house into one large residential unit. As he has carried out the renovation and refurbishment work on both halves of the house partly on his own, the construction work on the house has only been completed after a period of three years following the inheritance.
The family thus did not move into the inherited house until 2016, after a three-year renovation phase. The tax office rejected the real estate heir's application for an inheritance tax exemption. The action was also rejected by the Fiscal Court (FG). According to the ruling, the plaintiff had no legal claim to the inheritance tax exemption because the occupation of the property for self-use was delayed for too long. The inherited property should have been occupied for self-occupation within a "reasonable period" of no more than six months after acceptance of the inheritance. The plaintiff's arguments that he had started renovation work without delay also had no effect on the judgment.
The fact that the house first had to be drained and that the craftsman's company commissioned to carry out the work had only started late due to its order backlog also had no influence on the verdict. According to the regional court, the heir would have had the option of hiring a different craftsman company. On the basis of the available photographic material, it can be assumed that the de-cluttering and clearing of the house did not take place until about half a year after the father's passing. Thus, the reasonable period of six months until the occupation of the residential house had been exceeded by a multiple. Delays in renovation work can only be taken into account if they are not the fault of the purchaser.
Source: FG Münster
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