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Real estate transfer tax assessment base when acquiring a flat
When buying a condominium, the question arises how the included inventory is to be treated for tax purposes and whether the purchase‑price portion for items that are permanently attached to the structure is subject to real estate transfer tax (real estate transfer tax, GrESt).
In one case the buyer acquired a condominium together with a underground parking space and inventory. The purchase contract explicitly allocated a portion of EUR 10,000 for the inventory, of which EUR 4,200 related to the fitted kitchen and EUR 1,200 to the electrical appliances. The buyer calculated the GrESt only on the purchase price for the pure property and did not take the value of the kitchen and electrical appliances into account. The tax office did not recognise the reduced assessment base for the GrESt, but added the purchase‑price portion for the fitted kitchen and electrical appliances. The buyer objected, arguing that a fitted kitchen is movable inventory and should not be included in the assessment base of the GrESt.
Fitted kitchen – part of the property?
The GrESt is generally calculated on the value of the consideration, which in the purchase of real estate is typically the purchase price. Consideration includes any conceivable monetary and remunerated benefit that is promised for the acquisition of the property.
In the present case the purchase price was divided between the immovable thing, the land, and the movable thing, the fitted kitchen. If a single total consideration is agreed for the acquisition of immovable items on the one hand and movable items on the other, all those parts of the purchase price that relate to the land and its appurtenances belong to the consideration. The Federal Fiscal Court (Bundesfinanzgericht, BFG) therefore had to decide whether the fitted kitchen qualifies as an appurtenance of the property or as an independent movable item.
Kitchen installation shares the legal fate of the flat
Appurtenances are defined as movable items that belong to the owner of the land and are intended to serve the continuous use of the main object (in this case the flat) and are situated in a close spatial relationship to the land. The BFG clarified that, with a fitted kitchen, it does not matter whether it could theoretically be dismantled without damage and re‑installed elsewhere. What matters is the prevailing view in practice, not a subjective assessment.
A kitchen installation does not only serve the individual needs of the current occupant, but the ongoing use of the flat itself. Since the kitchen was also specifically adapted for this premises or installed there, it shares the legal fate of the flat. Consequently, the BFG qualified the fitted kitchen as an appurtenance and thus as part of the property. Accordingly, the purchase price for the fitted kitchen was included in the assessment base of the GrESt.
Note: The distinction whether items sold together with a property are to be regarded as appurtenances or as movable inventory is often difficult on a case‑by‑case basis. It is advisable to examine the purchase contracts carefully before calculating the real estate transfer tax.
Fitted kitchen – part of the property?
The GrESt is generally calculated on the value of the consideration, which in the purchase of real estate is typically the purchase price. Consideration includes any conceivable monetary and remunerated benefit that is promised for the acquisition of the property.
In the present case the purchase price was divided between the immovable thing, the land, and the movable thing, the fitted kitchen. If a single total consideration is agreed for the acquisition of immovable items on the one hand and movable items on the other, all those parts of the purchase price that relate to the land and its appurtenances belong to the consideration. The Federal Fiscal Court (Bundesfinanzgericht, BFG) therefore had to decide whether the fitted kitchen qualifies as an appurtenance of the property or as an independent movable item.
Kitchen installation shares the legal fate of the flat
Appurtenances are defined as movable items that belong to the owner of the land and are intended to serve the continuous use of the main object (in this case the flat) and are situated in a close spatial relationship to the land. The BFG clarified that, with a fitted kitchen, it does not matter whether it could theoretically be dismantled without damage and re‑installed elsewhere. What matters is the prevailing view in practice, not a subjective assessment.
A kitchen installation does not only serve the individual needs of the current occupant, but the ongoing use of the flat itself. Since the kitchen was also specifically adapted for this premises or installed there, it shares the legal fate of the flat. Consequently, the BFG qualified the fitted kitchen as an appurtenance and thus as part of the property. Accordingly, the purchase price for the fitted kitchen was included in the assessment base of the GrESt.
Note: The distinction whether items sold together with a property are to be regarded as appurtenances or as movable inventory is often difficult on a case‑by‑case basis. It is advisable to examine the purchase contracts carefully before calculating the real estate transfer tax.