Bauexperte
2010-12-02 11:00:17
- #1
Current Trends in the Real Estate Transfer Tax August 2009
Two aspects are particularly noteworthy here:
1. The individual federal states are allowed to determine the rate themselves through the Federalism Reform Accompanying Act. Berlin had already used this option as of 1.1.2007 to raise the nationwide uniform rate of 3.5% that had been in effect since 1998 to 4.5%. Since 1.1.2009, Hamburg has also joined as another city-state with a rate of 4.5%, and further federal states are likely to follow.
2. The German tax authorities are also entitled to demand real estate transfer tax on the construction costs if the property was previously acquired on one’s own account (ECJ, judgment of 27.11.2008, C - 156/08). The imposition of real estate transfer tax and VAT on builders does not contravene EU law. Germany is not prevented from including future construction services in the assessment basis for real estate transfer tax when acquiring a still undeveloped plot of land and thus subjecting a transaction to additional taxes.
The ECJ ruling confirms the growing trend of subjecting the overall object to real estate transfer tax. Based on the stricter case law by the Federal Fiscal Court (e.g., judgment of 23.8.2006, II R 42/04, BFH/NV 2007 p. 760 and decision of 2.4.2009, II B 157/08, BFH/NV 2009 p. 1146), tax offices increasingly include the value of the consideration pursuant to § 9 para. 1 no. 1 Real Estate Transfer Tax Act of land plus the subsequently constructed building, meaning that the taxation of the turnkey project is becoming more frequent.
A separate treatment and thus tax only on the land comes _only_ into consideration if the new owner looks for a suitable construction company themselves and has no connection to the seller of the land.
Due to the increasingly broader assessment basis, it is hardly surprising that the administration obtains evidence itself to prove the acquisition of the finished object. No transaction is more transparent for the tax offices than acquiring real estate domestically.
· Notaries must report the land purchase contract pursuant to § 18 Real Estate Transfer Tax Act.
· The contracting parties as taxpayers must report the contents of their non-notarized agreements within 2 weeks (§ 19 Real Estate Transfer Tax Act).
· The tax administration gathers indications that prove an assessment basis on the overall object. For this purpose, they require early information on the planned project from buyers of undeveloped land in building zones or if there are signs of construction intention by using form “816/9 Inquiry on Development”.
· Information from local newspaper advertisements or construction signs is collected to determine whether a uniform sale plus construction is planned.
· Financial conclusions about the income situation of former owner and buyer can be drawn from automatically incoming notifications. Therefore, control notifications are generally produced for the assessment offices on notifications sent by notaries starting at amounts of 125,000 EUR.
· In land transactions involving a foreign company as buyer or seller, the submitted sale notification is promptly forwarded with a copy of the land contract to the tax office responsible for the income taxation of the foreign company.
Practical Note
The Federal Fiscal Court (decision of 27.5.2009, II R 64/08) questions the constitutionality of real estate transfers in which the tax is not measured by the consideration but calculated according to the fiscal value pursuant to § 8 para. 2 no. 3 Real Estate Transfer Tax Act. This is because the requirement of the Federal Constitutional Court with regard to inheritance tax to value all asset categories at market level was not implemented here.
Best regards
Two aspects are particularly noteworthy here:
1. The individual federal states are allowed to determine the rate themselves through the Federalism Reform Accompanying Act. Berlin had already used this option as of 1.1.2007 to raise the nationwide uniform rate of 3.5% that had been in effect since 1998 to 4.5%. Since 1.1.2009, Hamburg has also joined as another city-state with a rate of 4.5%, and further federal states are likely to follow.
2. The German tax authorities are also entitled to demand real estate transfer tax on the construction costs if the property was previously acquired on one’s own account (ECJ, judgment of 27.11.2008, C - 156/08). The imposition of real estate transfer tax and VAT on builders does not contravene EU law. Germany is not prevented from including future construction services in the assessment basis for real estate transfer tax when acquiring a still undeveloped plot of land and thus subjecting a transaction to additional taxes.
The ECJ ruling confirms the growing trend of subjecting the overall object to real estate transfer tax. Based on the stricter case law by the Federal Fiscal Court (e.g., judgment of 23.8.2006, II R 42/04, BFH/NV 2007 p. 760 and decision of 2.4.2009, II B 157/08, BFH/NV 2009 p. 1146), tax offices increasingly include the value of the consideration pursuant to § 9 para. 1 no. 1 Real Estate Transfer Tax Act of land plus the subsequently constructed building, meaning that the taxation of the turnkey project is becoming more frequent.
A separate treatment and thus tax only on the land comes _only_ into consideration if the new owner looks for a suitable construction company themselves and has no connection to the seller of the land.
Due to the increasingly broader assessment basis, it is hardly surprising that the administration obtains evidence itself to prove the acquisition of the finished object. No transaction is more transparent for the tax offices than acquiring real estate domestically.
· Notaries must report the land purchase contract pursuant to § 18 Real Estate Transfer Tax Act.
· The contracting parties as taxpayers must report the contents of their non-notarized agreements within 2 weeks (§ 19 Real Estate Transfer Tax Act).
· The tax administration gathers indications that prove an assessment basis on the overall object. For this purpose, they require early information on the planned project from buyers of undeveloped land in building zones or if there are signs of construction intention by using form “816/9 Inquiry on Development”.
· Information from local newspaper advertisements or construction signs is collected to determine whether a uniform sale plus construction is planned.
· Financial conclusions about the income situation of former owner and buyer can be drawn from automatically incoming notifications. Therefore, control notifications are generally produced for the assessment offices on notifications sent by notaries starting at amounts of 125,000 EUR.
· In land transactions involving a foreign company as buyer or seller, the submitted sale notification is promptly forwarded with a copy of the land contract to the tax office responsible for the income taxation of the foreign company.
The Federal Fiscal Court (decision of 27.5.2009, II R 64/08) questions the constitutionality of real estate transfers in which the tax is not measured by the consideration but calculated according to the fiscal value pursuant to § 8 para. 2 no. 3 Real Estate Transfer Tax Act. This is because the requirement of the Federal Constitutional Court with regard to inheritance tax to value all asset categories at market level was not implemented here.
Best regards