Ina Ree­se Tax & Legal Prac­ti­ce – Flens­burg | Harrislee

Inheritance tax: An expert valuation of the property’s value must not be rejected outright

The Fede­ral Fis­cal Court (BFH) streng­thens the rights of heirs: an expert valua­ti­on of a property’s value must not be rejec­ted across the board sim­ply becau­se the purcha­se pri­ce is higher. 
Inheritance tax: An expert valuation of the property’s value must not be rejected outright

Inheritance tax: An expert valuation of the property’s value must not be rejected outright

Anyo­ne who is requi­red to pay tax on an inhe­ri­ted plot of land has the opti­on of decla­ring a value lower than that deter­mi­ned by the tax office. This is sub­ject to the pro­vi­si­on of an expert’s report sub­stan­tia­ting this lower mar­ket value. But what hap­pens if the tax office or the court sim­ply dis­re­gards the valua­ti­on report becau­se the pro­per­ty was sub­se­quent­ly sold for a hig­her pri­ce? The Fede­ral Fis­cal Court has drawn clear boun­da­ries in this regard in its ruling of 4 August 2026 (Ref. II B 87/25).

What had happened?

An heir had inhe­ri­ted two mixed-use plots of land, the owner of which had died in May 2020. He had the plots valued by a publicly appoin­ted and sworn valuer. The expert deter­mi­ned values of 210,000 euros and 305,000 euros for the two pro­per­ties. The tax office, howe­ver, appli­ed signi­fi­cant­ly hig­her asses­sed values of around 291,000 euros and 405,000 euros and dis­re­gard­ed the expert reports.

The crux of the mat­ter: the heir sold the plots of land in Febru­ary 2021 for a total of 900,000 euros – a pri­ce con­sider­a­b­ly hig­her than the valua­tions. Both the tax office and the Düs­sel­dorf Finan­ce Court (jud­ge­ment of 27 Novem­ber 2025) regard­ed this as grounds for rejec­ting the valua­tions in their enti­re­ty. For the court, the mat­ter was thus settled.

The Federal Fiscal Court (BFH) disagrees with this approach

The Fede­ral Fis­cal Court allo­wed the appeal and cri­ti­cis­ed the Fis­cal Court’s approach as con­sti­tu­ting a pro­ce­du­ral error. A court may not reject a pro­per­ly pre­pared expert report across the board sim­ply becau­se a sub­se­quent purcha­se pri­ce tur­ned out to be hig­her. Ins­tead, the court must exami­ne the con­tent of the report and pro­vi­de spe­ci­fic reasons as to why the expert’s indi­vi­du­al valua­ti­on methods are not convincing.

In the pre­sent case, the expert had taken into account defect and refur­bish­ment cos­ts of 20,500 euros and 80,500 euros respec­tively. The Finan­ce Court did not address the­se spe­ci­fic items at all. The Fede­ral Fis­cal Court express­ly cri­ti­cis­ed this.

What is the legal position?

Under the Valua­ti­on Act, an heir may demons­tra­te that the mar­ket value of a pro­per­ty is lower if the value deter­mi­ned in accordance with the sta­tu­to­ry valua­ti­on pro­ce­du­res is too high. In prin­ci­ple, they may pro­vi­de such evi­dence by means of an expert’s report. The report must be accept­ed if it is plau­si­ble and com­pli­es with the rele­vant valua­ti­on regulations.

It is important to note that, accor­ding to the clear wor­ding of the law, a later purcha­se pri­ce may ser­ve as evi­dence of a lower mar­ket value, but only in one direc­tion. A hig­her purcha­se pri­ce can­not be used to adjust the value of the pro­per­ty upwards for inhe­ri­tance tax pur­po­ses. The sta­tu­to­ry pro­vi­si­on pro­tects the tax­pay­er, not the tax authorities.

What does this mean for heirs?

The ruling streng­thens the rights of heirs who wish to demons­tra­te a lower value for inhe­ri­ted land. Courts and tax aut­ho­ri­ties must give serious con­side­ra­ti­on to expert reports and must not dis­miss them sim­ply by poin­ting to a hig­her sub­se­quent sale price.

  • A pro­per­ly pre­pared expert report car­ri­es con­sidera­ble weight in the deter­mi­na­ti­on procedure.
  • Indi­vi­du­al short­co­mings in the report only jus­ti­fy the cor­rec­tion of tho­se points, not the rejec­tion of the report in its entirety.
  • A hig­her purcha­se pri­ce can­not fur­ther increase the value deter­mi­ned by the tax office.

Anyo­ne wis­hing to decla­re inhe­ri­ted pro­per­ty at a lower value in their inhe­ri­tance tax return should com­mis­si­on a qua­li­fied valua­ti­on report at an ear­ly stage. In the event of a dis­pu­te, it is worth see­king legal or tax advice in order to con­sis­t­ent­ly assert one’s rights.

Source: Hau­fe: Tax

This post and the accom­pany­ing image were crea­ted with the help of AI and have been edi­to­ri­al­ly reviewed.

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