Art. 89 Tax Law (TL)

1. Any transfer that results in the conveyance of ownership of real property is subject to taxation.

2. Particularly considered as transfers are the sale, exchange, expropriation, contribution to a company, transfer of real property from a company to a holder of participation rights, inheritance division, dissolution of a community, participation of a co-heir in the benefit (Art. 619 of the Civil Code and Articles 28 to 35 of the Federal Act on Rural Land Rights) and participations in real estate gains based on public law.

3. Considered equivalent to a transfer are

a) Legal acts that, concerning the power to dispose of real property, effectively and economically equate to a transfer, such as the realization of the majority participation in a real estate company and the transfer for valuable consideration of a preemption right encumbering a real property;

b) The establishment of private servitudes on a real property or hydraulic force or public law restrictions on property ownership, when they significantly and permanently limit exploitation or decrease the market value of the real property and result in compensation; the compensation is not subject to real estate gains tax when it is taxable as income from real estate assets, particularly when it consists of an income from a building lease (Art. 19, para. 1, letter c) or income from an exploitation right.

4. The exploitation right particularly includes the rights to extract stone, gravel, sand, marl, peat, coal, and other minerals, as well as the rights to take or utilize water or hydraulic power.

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