by Elena Weismann in News from tax law
If a spouse inherits an apartment from a testator that has been used for residential purposes (such as a family home) and is situated in Germany, the European Union or the European Economic Area, this transaction remains tax-free under certain conditions. One condition is that the apartment must be used by the spouse (Purchaser) as their own residence immediately after the acquisition.
The German Federal Finance Court has decided that the tax exemption can only be applied to this situation if the testator was the legal owner of the apartment at the time of their death.
In this case the testator (a wife) bought an apartment and moved in with her husband, however she was not yet registered as the owner of property in the land register. In this case, although he was registered there after her death, he had to pay the inheritance tax for the full market value of the apartment.