Are properties in the state of development administrative assets?

The exemption rules of Sections 13a and 13b of the German Inheritance Tax Act (ErbStG) are being viewed increasingly critically and applied restrictively. The Muenster tax court has now countered this development with its ruling from 14.11.2024 (case no. 3 K 906/23 F and 3 K 908/23 F). It ruled that land that is not rented out and is in a state of development is not land transferred to third parties for use within the meaning of Section 13b para. 4 no. 1 sentence 1 ErbStG and is therefore not administrative assets. Future circumstances are not relevant. The strict reference date principle of the ErbStG, the wording of the provision and the prohibition of analogy stand in the way of this. It remains to be seen whether the reasons for the Muenster tax court's decision can also be applied to other cases of unlet properties (vacancy and renovation cases).