No Proportional Acquisition of Estate’s Property in the Paid Acquisition of a Co-Heir’s Share

Federal Finance Court, judgment of 26 September 2023 – IX R 13/22

In a landmark decision, the Federal Finance Court (FFC) ruled on 26 September 2023 (case no. IX R 13/22) that the paid acquisition of a share in a community of heirs does not constitute a proportional acquisition of real estate belonging to the joint estate of the community of heirs. This judgment departs from previous case law and contradicts the guidelines of the Federal Ministry of Finance (FMF) set out in a letter dated 14 March 2006 (BStBl 2006 I 253 Rz. 43), which allowed for such an acquisition to be considered as a proportional acquisition of real estate under certain conditions.

The FFC justifies its decision by stating that the purchase of a co-heir’s share merely redistributes property rights within the community of heirs, without leading to a direct acquisition of shares in the real estate. The community of heirs as a whole remains the owner of the real estate. This decision has significant implications for the tax treatment of such transactions. In particular, the tax advantages