Real estate transfer tax when selling property from GbR assets to sons
December 11, 2012 | 50,00 EUR | answered by StB Steffen Becker
My brother and I bought a building in 2007, which was registered as a "GbR" in the land register. We still own two other buildings, where we are each registered in the land register for half. For tax purposes, everything is managed in a GbR.
The building purchased in 2007 burned down in 2009 and was rebuilt in 2010. The insurance covered 1/3 of the construction costs.
Question a) Are 100% of the construction costs to be considered as production costs or only the equity share?
My brother and I want to transfer the aforementioned building to our two sons (each half). The sons will take over the existing loan obligations for 60% of the value. The rest is given as a gift.
Question b) Does real estate transfer tax apply? Since there is no personal identity through the transfer from the GbR to the sons.
If real estate transfer tax is due, we would first transfer the building from my brother to me (each half) within the GbR, and then to the sons. Valuation: each at production costs
Question c) Does this put us in the speculation topic? And if not, must there be a certain time between the two legal transactions (abuse of design?)
Dear inquirer,
Thank you for your inquiry. I will answer this within the scope of an initial consultation based on the information provided. Missing or incorrect information may affect the legal outcome.
Regarding a): Federal Fiscal Court judgment of 1.12.1992 (IX R 333/87) BStBl. 1994 II p. 12 states:
An indemnity from the insurer is only considered as part of the income from rental and leasing to the extent that it is intended to replace deductible expenses - such as depreciation and demolition costs. It also does not reduce the (re)construction costs.
Regarding b): Real Estate Transfer Tax (GrESt) is not applicable if your share is transferred directly to your son, or to your brother.
In the case of a free transfer from your brother to you -> Speculation period 10 years + Gift Tax: Exemption limit only €20,000!
Section 6 (1) sentence 1 of the Real Estate Transfer Tax Act states: "If a property is transferred from a joint ownership to the co-ownership of several persons involved in the joint ownership, the tax shall not be levied to the extent that the fractional interest received by the individual acquirer corresponds to the share in the assets of the joint ownership to which he is entitled."
You could transfer the property of the GbR into co-ownership of each of you and your brother. A later transfer after about 2 years of a share from each of you and your brother to each son would be exempt from Real Estate Transfer Tax and should not be seen as an abusive arrangement (abuse of legal forms).
I hope I have been able to provide you with a brief overview of the tax situation. However, in order to make a comprehensive and more specific statement, detailed information about your personal circumstances will be required.
Best regards,
Steffen Becker
-Tax advisor-
stb-becker@arcor.de
