Evidence of a lower land value
Opening clause
With the so-called "opening clause", heirs or acquirers of real estate assets have the option, as before, of providing evidence of a lower market value by means of an expert opinion or other suitable evidence (Sec. 198 BewG). This option is likely to be increasingly used in the future in view of the new reform of real estate appraisal.
Expert opinion
The tax authorities have defined the options for proving a lower market value in more detail in R B 198 of the 2019 Inheritance Tax Guidelines. Expert opinions of the locally competent appraisal committee or an expert for the valuation of real estate that are "capable of being proven" are recognized. In principle, appraisals are subject to the assessment of evidence by the tax office.
Burden of proof
The heir/acquirer always has the "burden of proof" for a lower fair market value. Case law places high demands on this burden of proof. The easiest way to provide evidence is to use an existing suitable purchase price. The tax authorities recognize as evidence a purchase price for the property to be valued that was achieved in the ordinary course of business (and not between close relatives) within one year before or after the valuation date. Even if a purchase price has been concluded outside this period in the ordinary course of business and the relevant circumstances have not changed compared to the circumstances on the valuation date, this can also serve as evidence of the lower fair market value. On the part of the tax authorities, there are "no reservations about regularly determining this value as the real estate value without value corrections (R B 198 para. 4 ErbStR 2019).
Status: January 27, 2023
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