When a loved one dies, family members usually only feel shock and sadness at first. You remember what you experienced together: vacations, weddings, birthdays, family celebrations. It's hard to think about what needs to be done now. Unfortunately, there are still a lot of formalities to be taken care of: organizing the funeral, placing the obituary notice, notifying the friends of the deceased. Working through a checklist helps many mourners during this time. Organization means distraction. But a specialist such as a real estate agent will also be happy to help you cope with your grief: He will take care of things like obtaining real estate documents - and in this way give you more time for your own needs.
Inherit property: Taxation of inheritances and gifts
One of the most important steps in the context of a death is the inheritance of the deceased. Is there a will? If so, the distribution of the inheritance among the relatives is the task of the probate court. The following applies: Taxes also apply to gifts or inheritances in Germany. However, dealing with the withholding tax in the case of inheritance looks a little different than in the case of classic asset acquisition. In the Federal Republic of Germany, inheritances and gifts are subject to the Inheritance Tax and Gift Tax Act. Of course, this also applies to real estate. If the inheritance exceeds the tax allowance defined in the law, this circumstance obliges you to pay tax.
The heir as the legal successor of the testator
Today, every second estate includes a house. For heirs, real estate means a lot of responsibility. Because even a villa with a pool and ten rooms quickly turns into a nightmare in the event of a mortgage. After all, the heir, as the legal successor of the deceased, undertakes to pay interest and repayments to the banks after his or her death. With the inheritance of a property, you as the heir become the legal successor of the testator. This means that you will be the owner of his property in the future. You also take responsibility for the house. At the beginning of the inheritance there are a few essential questions: How valuable is the estate or how over-indebted is it? As real estate agents, we are happy to help you answer all your questions.
Inheriting the house: taking over all imaginable rights and obligations
When the inheritance occurs, the law gives the heirs little time to mourn. You, as the heir designated by law or testament, are from now on the legal successor of the testator. In other words, you assume all conceivable rights and obligations of the deceased. In this way, the legislature prevents the estate from becoming ownerless. Remember: as an heir, you are not only inheriting the assets of the deceased. The responsibility for the debts of the testator now rests on your shoulders. In this context, both the value and the usability of a property must be included. Above all, take a look at the land register. As an heir, you have a right of inspection. This quickly results in any existing burdens with mortgages or land charges.
Skepticism in the case of an encumbered real estate legacy or one in need of rehabilitation
Our advice: keep your skepticism in the case of a burdened real estate legacy or one in need of renovation. Because with a very high reorganization effort or expense for the capital service, the costs usually exceed the profit. If you inherit your parents' house or apartment, other aspects naturally also apply to your decision. You may be attached to the property for idealistic or emotional reasons. But here, too, we advise you: Don't throw yourself into debt! If in doubt, contact experts such as our brokers: They will help you to obtain the necessary real estate documents such as extracts from the land register. In this way, your request is in the safest possible hands.
Inheriting property: sale, rental or owner-occupation?
After the inheritance has occurred, you have six weeks to renounce the inheritance. So every single day really counts here. If possible, explain the refusal to the magistrate at the district court responsible for the place of residence of the testator. If, on the other hand, you decide to accept the inheritance, you are faced with the question: sell, rent or use yourself? In this context, tax aspects also play a role that should not be underestimated. If the value of the estate exceeds your personal inheritance tax allowance, the law obliges you as the heir to pay inheritance tax.
The aspect of personal use for exemption from inheritance tax
If you inherit a house or apartment for your own use as a spouse or partner, the legislator exempts you from inheritance tax. However, if you move out of the house or apartment within a period of ten years, the tax exemption will no longer apply retrospectively to the day of the inheritance. The legislature usually only accepts exceptions in the case of urgent reasons for moving out, such as moving to a nursing home or changing your place of residence to avoid unemployment. If you inherit a house or an apartment as a child of the deceased, you can also benefit from the tax exemption mentioned above. In this case, however, the limit for the living space is 200 square meters. On the other hand, you pay inheritance tax for a possibly exceeding portion of the area.
Inheriting a house: establishment of home ownership
If you tend to rent out your real estate inheritance, the inheritance tax on the property is calculated on the basis of up to 90 percent of its market value. Rental income is subject to income tax as income from letting and leasing. As the legal successor to the landlord, you undertake to enter into existing rental agreements with the tenants. In the case of personal use, please note the notice period specified in the rental agreement. If there are several heirs, there is the possibility of dividing up the apartments and establishing ownership of the apartment. If you sell the property after condominium ownership has been established, the tenant has a statutory right of first refusal in the condominium he or she occupies. The right depends on the agreements with the prospective buyer in the purchase contract.
Applying for a certificate of inheritance from the probate court
Another option in the case of real estate inheritance is to sell the property. Of course, this will give you more liquidity. Any existing mortgages and land charges can be serviced from the sale proceeds. But be careful: Never overestimate the market value of the property. It is best to ask a real estate agent in advance. If you inherit a house or an apartment, it is advisable for you as the heir and owner of the property to correct the land register. You need a certificate of inheritance as proof of your legal succession. You can obtain this upon application to the probate court. In the case of wills, it is sufficient to submit them to the land registry. There are no land register fees for this within a period of two years after the deceased's death. Your purchase is also not subject to the Real Estate Transfer Tax Act. If you as the owner make an entry in the land register, you do not pay any real estate transfer tax. Do you simply lack the time to obtain all the necessary real estate documents? Our brokers will be happy to take care of your concerns.
Inherit property: division auction as a last resort
If there are co-heirs to a property, you are part of a community of heirs. In this case, as the sole heir, of course you do not have sole control of the house or apartment. Ideally, you will therefore make a joint and amicable decision. Be sure to avoid a divisional auction, because the amount it brings in is usually less than the proceeds from a sale. In addition, the court proceedings often take months. During this period, the administration of the house or apartment is the responsibility of your community of heirs. As part of a divisional auction, the district court compulsorily auctions off the property in a publicly accessible process. In this context, the district court commissions an expert to determine the market value of the property. The district court determines the market value based on the expert opinion. They also agree on an auction date. The highest bidder becomes the owner of the property. However, it usually takes one to three years for this process to be completed. In addition, as part of the community of heirs, you risk high economic losses. One way out is the possibility of paying out the co-heirs' shares to the co-heirs.
The degree of relationship as a decisive factor for the amount of the exemption
If you inherit a house or an apartment, you agree to pay inheritance tax. However, the law grants you tax allowances that are not to be underestimated. The degree of relationship and the resulting tax class are decisive for the amount of the exemption. For spouses and life partners in inheritance tax class I, the exempt amount is EUR 500,000. Children or grandchildren benefit from a tax allowance of 400,000 euros. If the estate after deducting the liabilities exceeds these allowances, the legislator obliges you as the heir to pay inheritance tax of between seven and eleven percent. Our brokers will be happy to answer any questions you may have about your real estate heritage.
Inheriting a house: clarity about the value of real estate inheritance
Finally, it should be noted: The inheritance of a property means first of all correspondence with the tax office. Because all inheritances in Germany are subject to tax according to the law. Inform the tax office about the inheritance within three months after the death of your relative. Anything else would be tax evasion. If you want to sell the inherited property, it is advisable to take stock of the circumstances as precisely as possible. If in doubt, it is better to seek tax or legal advice. A real estate agent will also be happy to help you assess the market value and marketability of a property. With the help of this real estate valuation, you will get clarity about the value of your real estate heritage. Criteria such as size, Environment and level of modernization. You can find more information on selling real estate and an initial valuation at https://mainhattan-immobilien.eu/immobilie-verkaufen/ .
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