Rental by the day does not lead to speculative profits

Renting out individual rooms for a few days a year does not change the exemption from taxation of a speculative gain due to exclusive self-use of the property.

The sale of a property within ten years of purchase leads to taxable speculative gains if the property was not used exclusively for own residential purposes. However, the Lower Saxony Tax Court is convinced that the fact that individual rooms were rented out to trade fair guests on a daily basis in the years prior to the sale (in the case in dispute, between 12 and 25 days per year) does not trigger a pro rata tax liability on the sales profit for the rented rooms.

The court stated that it cannot be inferred from the wording of the law that all parts of a building must be used for own residential purposes in order to be able to assume the exemption from taxation. Therefore, the object of assessment is the entire property as an economic good. The temporary rental of individual rooms does not lead to the creation of an independent asset within the real estate that would have to be considered separately. The tax office has filed an appeal against the ruling with the Federal Fiscal Court.