The draft for an annual tax law for 2022, which includes planned changes to the Valuation Act (BewG), is currently being discussed in the Bundestag and Bundesrat. This forms the basis for the valuation of real estate for inheritance and gift tax purposes. As a result of the planned changes, there may be a higher tax burden on the free transfer of real estate from 2023 due to the new valuation.
What specific changes does the bill envisage? If a piece of real estate is to be transferred free of charge – i.e. as a gift or in the event of inheritance – and this is a taxable transaction, an assessment is required. The same applies in certain cases to the transfer of shares in real estate companies. Lower market values for real estate were regularly determined using the previous valuation methods. The draft law now envisages an adjustment of the valuation procedure, through which the actual market value can be determined more precisely. In this way, the further increase in property prices should be better taken into account in the tax assessment.
Source: IVD Süd