The BFH annulled the decision of the Berlin-Brandenburg tax court and referred the case back to the Berlin-Brandenburg tax court for a different hearing and decision (cf. TXGT news from 20 January 2020).
The tax courts may not replace a contractual purchase price allocation to land and buildings, which fundamentally fails to reflect the actual circumstances and does not appear economically viable, with the allocation determined in accordance with the working aid of the Federal Ministry of Finance (BMF).
The tax court considered the BMF working aid to be a suitable valuation procedure to be able to refute the market adequacy of a contractual purchase price allocation, but at the same time also a suitable estimation aid. The BFH has now disagreed with this.
The BMF's working aid does not guarantee the allocation according to the real market values of land and buildings required by case law. This is because the selection of available valuation methods would be narrowed down to the (simplified) asset value method. The local or regionalisation factor, which is particularly relevant in metropolitan areas, is also not taken into account when determining the value of the building.
For these reasons, in the case of a disputed property valuation, the tax court is generally required to obtain the expert opinion of a publicly appointed and sworn expert for the valuation of property.
A prematurely accepted, incorrect purchase price allocation can result in a permanent and often high overall tax disadvantage. It is therefore often worthwhile to counter the arbitrary reduction of the depreciation assessment basis to the detriment of the property investor by understating the value of the building and to enforce economically appropriate allocations in tax proceedings with the tax authorities.
Your TAXGATE team can provide you with efficient support based on a large number of successful procedures.
