Division of a property purchase price
August 30, 2014 | 30,00 EUR | answered by Anton Pernitschka
In 2013 we bought an old semi-detached house (built in 1913) with basement, ground floor, upper floor and attic (rented out) on a 425 sqm plot.
In the tax return, we made a split of 80:20 for the acquisition costs, which the tax office does not recognize. The purchase price split is now 50:50, determined by the tax office analogously to the market value based on land values and standardized construction costs of the building through estimation, with the standardized construction costs per square meter being 454 €. Do we have to accept this or are there other ways to determine the value of the building, for example based on a bank appraisal with a higher market value?
We initially declared the building as a multi-family house, but after completing renovations, we will now be living in the ground floor and upper floor ourselves. Does this change the house to a single-family or two-family house, and should we inform the tax office about this? Is it enough to simply state "single-family/two-family house without further details" (standardized construction costs 499), or do we need to provide details about the existing floors (standardized construction costs 410, the least favorable option)? We obtained these values from an online calculator. Thank you for your advice.
Dear questioner,
In the context of an initial consultation and your fee commitment, while adhering to the regulations of this forum, I would like to answer your question.
According to the Federal Fiscal Court (BFH) ruling of 10.10.2000, BStBl II 2001, 183, the total purchase price for an improved property should be allocated not according to the so-called residual value method, but based on the ratio of market values or partial values of the land on one hand, and the buildings on the other.
The purchase price allocation is based on the provisions of determining market values based on the Building Code (asset value method according to the Real Estate Valuation Ordinance). This is a qualified estimate that is expertly justified and rebuttable.
The Federal Ministry of Finance published a guide for calculating the allocation of a property purchase price in January 2014 with form KPA 2/14. This guide explains the calculation scheme of the allocation using an example.
In your case, it seems that the tax office has generally followed this guide (or instruction) from the Federal Ministry of Finance. Of course, there can be deviations from this allocation method. However, the tax office will only accept an estimate from a sworn expert. A report from the bank may not be sufficient.
You must provide details about the existing floors to the tax office, as a qualification as a multi-family house, single-family house, or two-family house will be made by the tax office's unit value office.
The response was based on the description of your situation. Missing or incorrect information about the actual circumstances can affect the legal outcome.
Sincerely,
Anton Pernitschka
Tax advisor
