The acquisition of a property by heirs can, under certain conditions, be tax-exempt, particularly if it continues to be used as a family home and does not exceed a living area of 200 square metres. A key condition is the timely commencement of owner-occupation, which usually must occur within six months of the inheritance. In this context, Wüstenrot Bausparkasse refers to a significant court ruling that underscores the relevance of this deadline.
In a specific inheritance case, an heir of a property failed to occupy the inherited property within the prescribed period. Reasons for this included a holiday ban imposed by the employer, which complicated the execution of necessary renovation works. Initially, the heir only carried out minor works independently and occupied the property on a day-by-day basis. External firms were only commissioned for more extensive renovations in the following year, which led to the actual move-in approximately three years after the inheritance.
Judicial Assessment of the Delay
The competent tax office considered the time limits for owner-occupation to be exceeded and denied the requested tax exemption for the inheritance. The heir appealed against this decision. However, the Munich Fiscal Court, with its ruling under file number 4 K 1677/24, confirmed the legal opinion of the regional tax authorities. The court stated that a tax exemption can also be granted for a later move-in if the new owner is not responsible for the delay. Examples cited included construction delays during necessary renovation measures.
In the present case, however, no renovation plan existed for the inherited property. The court also found that the heir initiated the awarding of contracts to construction companies for the renovation only at a late stage. The Fiscal Court attributed these delays to the heir himself. Consequently, the possibility of a tax exemption for the inheritance was forfeited, as the deadlines for the commencement of owner-occupation were deemed not to have been met. The ruling highlights the necessity of timely and strategic planning when taking over inherited properties to avoid jeopardising tax advantages.
