Strategy for bridging the speculation period for real estate
October 7, 2015 | 40,00 EUR | answered by Oliver Burchardt
Is the following legal opinion still current/valid and how can the buyer protect himself against an early or refused approval in the below construction (private law contract)?
BFH judgment of 2.10.2001 (IX R 45/99) BStBl. 2002 II p. 10
If an unauthorized representative acts on behalf of the buyer in a notarized purchase contract for a property within the two-year speculation period, and the buyer approves the transaction outside of the speculation period, the private sale transaction is not taxable under § 23 Abs. 1 Nr. 1 Buchst. a EStG. The approval does not have retroactive tax effects on the time of the transaction.
Income Tax Act 1990 § 23 Abs. 1 Nr. 1 Buchst. a, § 22 Nr. 2; Civil Code § 184 Abs. 1.
Previous instance: Lower Saxony FG (EFG 2000, 126)
Dear inquirer,
Thank you for your inquiry, which I would like to answer in the context of an initial consultation.
I have not found any judgments indicating that the legal opinion of the Federal Fiscal Court (BFH) has changed in this matter.
However, the judgment is not a basis for a strategy to avoid taxation of a private sale transaction.
The decided case is based on a very specific constellation, which could only have an effect due to the temporal proximity to the then two-year speculation period. Only if such temporal proximity exists in your case (in the case of the judgment less than a month) would the decided case be applicable.
In such a case, you may certainly agree with the buyer to finalize the purchase shortly thereafter.
By the way, entering into a private contract with the unauthorized representative to protect yourself is also not a solution here. With such a contract, you are only documenting that there was indeed a power of attorney, but you are only trying to present something else externally for tax avoidance purposes. The line to punishable tax evasion or complicity is very close here, if not already crossed.
Furthermore, the buyers may not use the acquired property until the expiration of the speculation period of 10 years. If in the decided case the buyers had moved into the apartment on July 1st, the approval of the purchase agreement, which would have triggered the tax liability, would have been present in this case.
Best regards,
Oliver Burchardt
