Contributing a family home to a spousal partnership under German civil law is exempt from gift tax
The tax exemption for the transfer of a family home pursuant to Section 13(1) no. 4a of the Inheritance and Gift Tax Act (Erbschaft- und Schenkungsteuergesetz, ErbStG) constitutes a key privilege under gift tax legislation. In advisory practice, the question that increasingly arises here is whether and under what conditions this preferential tax treatment would also apply if the family home was not transferred directly to the other spouse, but rather contributed to a partnership held by both spouses. In a recent decision, the Federal Fiscal Court (Bundesfinanzhof, BFH) answered this question in favour of the taxpayer.
In its ruling of 4.6.2025 (case reference: II R 18/23), the BFH decided that the tax exemption under Section 13(1) no. 4a ErbStG also has to be granted if a spouse contributes a solely owned family home for no consideration to a spousal partnership under German civil law (Gesellschaft bürgerlichen Rechts, GbR) in which both spouses have an equal share. In the case in question, in 2020, the spouses had founded a GbR in which they each held a 50% stake. The wife was the sole owner of a house that was used by the spouses for their own residential purposes and thus satisfied the requirements for a family home. In the same notarial document establishing the GbR, the wife transferred the property for no consideration to the company assets of the GbR. The spouses described the stake in the property obtained by the husband by this means as a marital gift for no consideration.
The husband declared the transaction for gift tax purposes and claimed the tax exemption under Section 13(1) no. 4a ErbStG. The local tax office refused to grant the exemption on the grounds that a direct transfer of the family home to the spouse was lacking. Neither the tax court nor the BFH agreed with this view. The BFH ultimately clarified that, owing to the contribution of the property to the GbR, the husband had been enriched by half the value of the family home for gift tax purposes. In this case he was nevertheless also entitled to the tax exemption under Section 13(1) no. 4a ErbStG. The term ‘acquisition of the family home’ covers not just sole ownership but also the acquisition of joint ownership.
