Inheritance tax allowance in the case of a rental company

Irrespective of the number of rented apartments, in the case of a rental company these are only considered tax-privileged business assets in exceptional cases.

The apartments rented to third parties by a residential rental company are only eligible as business assets for inheritance tax purposes if, in addition to the rental, the company also provides additional services as part of a commercial business operation that exceed the level customary for long-term rentals. These additional services must give the rental a primarily commercial character. According to the Federal Fiscal Court, the fact that the apartments are held as business assets of the company is not sufficient for the preferential treatment. These requirements apply regardless of the number of apartments rented out.