Scope of land covered by the primary residence exemption

In the sale of a property used as a primary residence (single-family home) with a total area of approximately 3,600 m², the seller claimed a full exemption from real estate capital gains tax (ImmoESt) for the entire land portion during self-assessment. However, the Austrian tax office granted the exemption only for 1,000 m² of land. In the following appeal, the Federal Fiscal Court (BFG) upheld the tax office’s view and dismissed the complaint, stating that 1,000 m² should remain tax-exempt, as this is the area typically required for a building plot.

In a regular appeal to the Supreme Administrative Court (VwGH), the appellant argued that the phrase “typically required for a building plot” should depend on local conditions and the size of the building on the plot.

The VwGH rejected this argument and held that the location and development of the property are irrelevant for the tax exemption. The 1,000 m² threshold is to be regarded as a standard average value.

VwGH 24.04.2024, Ro 2022/15/0020