Challenging High Property Valuations
for Inheritance and Gift Tax
HPS Consulting has highlighted an important consideration for taxpayers facing inheritance and gift tax assessments in Germany: the possibility of challenging an excessively high property valuation.
Under§ 198 BewG (German Valuation Act), taxpayers may provide evidence that the fair market value of a property is lower than the value determined for tax purposes. However, demonstrating a lower value can be a complex process and is subject to strict evidential requirements.
According to HPS Consulting, professionally prepared expert valuations often play a key role in supporting such claims. These reports must meet rigorous formal and substantive standards to be accepted by the authorities. The quality and robustness of the evidence presented can therefore have a significant impact on the outcome of proceedings.
In certain circumstances, an actual purchase price may also be accepted as evidence of a property's lower market value. However, this approach is only recognised under specific conditions, including where a prompt sale has taken place between independent third parties at customary market terms.
The topic is particularly relevant for individuals, families and advisers involved in inheritance and succession planning, where property valuations can have a substantial impact on tax liabilities. Careful preparation and strong supporting documentation can be critical when seeking to demonstrate that a property's true market value is lower than the assessed figure
Affected businesses should review the new requirements carefully to determine whether they fall within the scope of the rules and ensure they are prepared to meet any applicable reporting obligations.
HPS expert Heike Niemann notes that the quality of the expert opinion and supporting evidence can be decisive in achieving a successful outcome.
To read the full article from HPS Consulting:
