A buyer purchases an undeveloped plot of land from a municipality. She is contractually obliged to bear the development costs. If this is the case, she only has to pay real estate transfer tax on the purchase price of the undeveloped property, but not on the purchase price including the development costs. This has now been announced by the Federal Fiscal Court (BFH) (ruling from September 28, 2022, II R 32/20), thereby continuing its case law.
In this case, a buyer and her husband had acquired co-ownership of an undeveloped plot of land in a municipality with a development obligation. The contract stipulated a purchase price of EUR 102,600 for the land sold and a further partial amount for all development costs. When determining the property tax, the responsible tax office now based its assessment on the total amount.
The plaintiff initially lodged an objection against this with the tax office, but this was rejected. She then appealed to the tax court, which also dismissed her appeal. She lodged an appeal and demanded a reduction in the real estate transfer tax. After all, the development costs were not part of the assessment basis. The BFH ultimately ruled in her favor. "The contested notices must be amended to the effect that the development costs are not to be included in the basis of assessment," said the BFH.
Sources: bundesfinazhof.de (judgment of September 28, 2022, II R 32/20)/haufe.de
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