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Inheriting a property? This must be taken into account with the estate


It often happens that you inherit a property – however, the heirs are often unsure what to do with the house or apartment. Sell, rent or use it yourself? In addition to these questions, there are a number of other questions regarding possible costs, obligations and much more.

Accept inheritance or turn down?

Before deciding whether to accept the inheritance or to reject it, there are a few things to consider. First of all, the condition of the property should be checked – what about the year of construction and any defects? For example, if the house is very old and has not been renovated for a long time, you should think carefully about whether you actually want to become the owner. Because the property could still lead to some problems.

“As the owner of a property, you are responsible for ensuring that your property does not pose any risk. In the event that you fail to fulfill your obligations and this results in damage, you will be liable with your private assets ”, the Sparkasse points out in an information sheet on the subject of real estate inheritance.

The heirs must therefore be aware of the obligations associated with the inheritance.

In addition, the liabilities should also be checked as soon as possible. It is not uncommon for the property to be over-indebted. Questions about a possible remaining debt, a sale proceeds or the repayment of debts should be answered before deciding for or against the inheritance. The inheritance can be rejected in writing within a specified period.

If the heirs decide to keep the property, the entry in the land register must be changed. For this purpose, an application for correction of the land register must be submitted to the land registry in whose district the property is located. Proof of change, such as a certificate of inheritance, is required. Alternatively, a contract of inheritance or a notarial will is sufficient, provided that these documents clearly indicate the succession.

What is the value of the property?

The potential heirs should also determine the current market value of the property before making a decision. This is particularly relevant because of the inheritance tax. For the purpose of valuation, the heirs can, for example, look around on real estate portals. “Here, customers enter the most important data on their property in an online tool. This includes the location, year of construction, size, construction method as well as details on the structural condition and the level of equipment, ”explains Tobias Frank, press spokesman for ImmobilienScout24.

The approximate value is then determined on the basis of properties that have already been advertised. Nevertheless, the assessment is of course not as good as that of an appraiser. “The online appraisal is ideal for an initial assessment of the property value, but it does not replace an appraiser,” reports Frank. “An expert opinion that will stand up in court can only take place through an expert appraisal. The appraiser works his way into the specific property and his value analysis is accepted as a basis for evaluation in legal disputes. This can be important in the event of inheritance, for example when inheritance tax is due and the property value is in dispute, ”the expert continues.

Rent or sell?

When you finally take over the inheritance, another important decision is imminent: should you rent out the property or maybe sell it?

A rental can be useful if the property has already been paid off, but also if the rental income covers the total expenses. However, unplanned follow-up costs such as repairs should always be kept in mind. All inheritances are also subject to tax – including real estate. The tax office must therefore be informed within three months. However, the heirs are entitled to an allowance – this depends on the degree of relationship. While spouses and registered life partners can look forward to an allowance of around 500,000 euros, for example only around 100,000 euros are free for parents or grandparents.

If there is no financial risk after taking all of these factors into account, renting the property may be the right choice.

Should the decision be made to sell the property, however, it is important whether it is a community of heirs or a sole heir. In the case of a community of heirs, there must be agreement, so a majority decision counts, while a sole heir can of course decide freely.

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The speculation period should be observed when selling. If there are less than ten years between buying and selling the property, income tax takes effect. However, only the gain in value since the purchase of the property is taxed, not the entire value of the property.

There are a number of things to consider when inheriting a property. In the run-up to the decision, the most important questions should be clarified and an excessively high risk should be excluded.

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