Decision on the Taxation of Real Estate Gains in the Case of Replacement Acquisition

Facts

A. sold his condominium in B. (ZH) and acquired a new property in D. (GR) within the statutory deadline. As this was a replacement acquisition of a residential property used permanently and exclusively by the owner, the real estate gains tax was initially deferred. When A. and his wife later relocated their primary residence to the United Kingdom, the tax authority considered the requirements for the tax deferral no longer met and subsequently levied the real estate gains tax.

Considerations

The Federal Court upheld A.'s appeal. It stated that the term "residential property used permanently and exclusively by the owner" is regulated by federal law and only applies to the primary residence. For the criterion of permanence to be met, it is not necessary for the owner to have resided in the new property for the entire duration of ownership. The decisive factor is that the owner established their residence there at the time of acquiring the replacement property, even if they later relocate it. The cantons have no discretion to make exceptions in this regard.

The Federal Court determined that A. had met the requirements for the tax deferral, as he had initially relocated his residence to D. and…