Inheritance tax exemption – family home – tax consulting – Holzwickede – Kamen – Lünen – Hagen – Dortmund

The transfer of an owner-occupied apartment

(so-called family home) to the surviving spouse or children is exempt from inheritance tax under certain conditions. The wording of the law favors the acquisition of ownership or co-ownership of a family home.

If a property is purchased, it may well take some time before the transfer of ownership is also entered in the land register. In the meantime, the purchaser’s claim is usually secured by a priority notice of conveyance in the land register. If the testator dies before the property is registered, the question arises as to whether this is also a preferential acquisition of a family home. The Federal Fiscal Court denied the inheritance tax exemption for this case.

In case of dispute

spouses jointly acquired a condominium yet to be built; a priority notice of conveyance was registered. Half a year after the family moved in, the wife died. The registration of the property in the land register had not yet taken place at that time and the husband inherited her “claim to property”.

In the opinion of the court, a priority notice of conveyance is merely a secured “claim to the procurement of ownership”. However, the wording of the law requires the acquisition of ownership or co-ownership under civil law, which only exists upon registration. Therefore, a tax exemption for a family home did not qualify.

(Further comments & information on this can be found in our information letter 06/2018 under the item 3.)