date | theme

12. January 2022 | Sell OHG with real estate to holding company and take advantage of tax advantages

17. January 2022 | Transfer of real estate assets: Attention – You have to pay attention to this!

21. January 2022 | Procuring production costs for real estate: Maintenance measures carried out in a tax-optimized manner

25. March 2022 | Calculate the new property tax: for example, the general property tax law

August 9, 2022 | Refund of the real estate transfer tax upon reversal of the purchase contract (this contribution)

If a purchase contract for real estate is revoked, the property transfer tax already incurred can also be refunded under certain conditions. We explain when the refund of the property transfer tax is possible and what you need to consider.

1. refund of the real estate transfer tax: § 16 paragraph 1 GrEStG

1.1. refund of the real estate transfer tax upon reversal of the acquisition operation

Once a tax claim has arisen, the parties can in principle no longer be eliminated subsequently according to § 38 AO. An important exception to this applies, however, to the real estate transfer tax according to § 16 GrEStG. After that, the accrued real estate transfer tax in certain cases subsequently ceases. The property acquisition tax is therefore waived upon request if an acquisition process has been reversed before ownership of the property has passed to the buyer.

The particularly strict requirements of the Property Acquisition Tax Act for undoing the acquisition process are often the starting point of disputes. The legally effective cancellation of the purchase contract is not sufficient for this alone. Rather, a purchase contract is only cancelled if the contractual partners have released themselves from their contractual obligations in such a way that the possibility of disposing of the property does not remain with the buyer, but the seller regains his original legal status. Therefore, the civil cancellation of the purchase contract is often not enough alone. In addition, the parties must present themselves as if the sales contract had not been concluded and therefore cancel all effects of the sales contract.

1.2. Two-year period for refund of real estate transfer tax

In addition, the reversal must have taken place within two years of the tax. The deadline is particularly problematic if several acts are required to reverse the purchase contract. The question then arises as to what time is decisive.

1.3. acquisition process displayed

The possibility of tax-neutral reversal exists according to § 16 paragraph 5 GrEStG only if the original acquisition process has been completely reported to the competent tax office. However, this does not apply to a land sale contract according to § 1 (1) no. 1 GrEStG, but only to the acquisition transactions under company law according to § 1 (2) to 3a GrEStG. An incomplete notification of a land purchase contract by the notary according to §§ 18, 20 GrEStG therefore does not prevent tax-neutral reversal.

2nd refund of the real estate transfer tax in case of disposition

2.1. Preliminary injunction agreed

When selling a plot of land, it can be agreed that the buyer is obliged to cancel the reservation for disposition registered in his favour if the seller has withdrawn from the purchase contract. In particular, the question arises as to when the entitlement to a tax refund arises if the prior notice registered for the buyer is deleted again by the notary on the basis of a power of attorney.

2.2. Undoing of the acquisition operation

For example, if the buyer does not pay the purchase price, the seller can withdraw from the purchase contract. The notary then draws up the cancellation permit after appropriate advance notice and submits it to the Land Registry for enforcement. Then the buyer is entitled to a refund of the already paid real estate transfer tax according to § 16 (1) no. 1 GrEStG. This claim may be assigned and seized. If the assignment takes place before the attachment, the claim is in itself to the assignment recipient.

However, it is problematic if the assignment of the claim for a refund of the real estate transfer tax took place before the deletion of the prior notice in the land register. Then the right to a refund of the real estate transfer tax has not yet arisen and thus the assignment is ineffective. Rather, it arises only with the actual and complete reversal of the purchase contract (see above). For this purpose, the prior notice entered in the land register for the benefit of the buyer must be deleted. In any case, the mere power of attorney to the notary to authorize the deletion of the prior notice is not sufficient.

However, the impairment of the marketability of the property can also be waived before deletion of the reservation, so that the right to a refund of the real estate transfer tax arises earlier. This applies if the buyer grants the seller a formal cancellation permit and the seller can freely dispose of it. The cancellation permit required for the reversal of the purchase contract is then available if the notary has actually approved the cancellation of the reservation on behalf of the buyer by own deed. It is sufficient if the cancellation permit has already been applied for at the Land Registry. However, even then a reversal of the purchase contract can only be assumed if the notary can make use of the granted cancellation permit.

2.3. Two years for real estate transfer tax refund

Some tax offices assume that the deletion of the reservation in the land register must have taken place within the two-year period. However, the legal situation has not been finally clarified in this respect. In practice, the cancellation should therefore be requested from the Land Registry if possible within the two-year period. Where possible, enforcement within the time limit should also be encouraged.

Conclusion on the refund of real estate transfer tax