Is the redemption of residential rights tax-free?
November 12, 2021 | 40,00 EUR | answered by Steuerberater Knut Christiansen
I live in Bavaria in a condominium and have had a free right of residence for years. The owner wants to pay me 50,000 euros to have me delete my right of residence in the land register. Question: Is this compensation amount tax-free according to which §?
Good day,
I am happy to give you an assessment of your question.
The replacement of the residential right for a lump sum payment generally leads to a non-taxable reshuffling of assets for the holder of the residential right. However, the value of the residential right should match the redemption amount, so a time-related evaluation is advisable. For example, if the redemption amount is significantly too high, the tax office could consider a gift to you as the holder of the residential right in the amount of the difference. If so, gift tax would then be due on the difference, taking into account a tax-free allowance for gifts. However, if the redemption amount is reasonable, you can receive it tax-free (see BMF dated 30.09.2013 - IV C 1 - S 2253/07/10004 BStBl 2013 I p. 1184).
Please note that this forum cannot replace personal advice. Missing or incomplete factual information can therefore change the result.
Kind regards,
Knut Christiansen
Tax consultant
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