Tax exemption for family home despite delayed self-use

If there are valid reasons for delayed owner-occupancy, an inheritance tax exemption for a family home is still possible after more than six months.

The tax exemption for a family home for inheritance tax purposes requires that the heir intends to use the property immediately for his or her own residential purposes. In practice, what is considered "without delay" repeatedly causes disputes with the tax office. Until now, the tax offices have accepted a maximum period of six months for the start of owner-occupancy.

However, the Federal Fiscal Court also considers a longer period to be reasonable in individual cases. However, in this case, the heir must explain and credibly demonstrate at what point in time he or she decided to use the property for his or her own purposes, the reasons why it was not possible to actually move into the property earlier and why he or she is not responsible for these reasons.

A possible and permissible reason for delayed owner-occupation is provided by the dispute in which a lengthy inheritance settlement delayed owner-occupation. In addition, the Federal Fiscal Court has ruled that the part of the property that is acquired only in the course of the inheritance settlement is also covered by the tax exemption.