Inherited a property? What you need to consider in 2022

Every year, large fortunes are inherited in Germany. This often includes a property such as a plot of land. As with a house, the question arises with undeveloped land: "What should be done with it?" Since this year, there has also been another challenge.

The property tax was reformed last year. Around 35 million properties will have to be revalued by the end of 2024. Owners will have work to do.

What owners need to do now

Anyone who has owned a property - a house, apartment or plot of land - since January 1, 2022 must submit a separate property tax return electronically via the Elster tax platform between July 1 and October 31, 2022. Ask a real estate professional and tax advisor for information on this.

Inherited property, and now?

First of all, there are several questions: Is there a sole heir or a community of heirs consisting of several heirs? Has the inheritance been regulated in a will or does statutory succession apply? Does inheritance tax have to be paid? This depends on the degree of kinship and the value of the property.

A local quality estate agent determines the value of the property. There are different tax allowances depending on the degree of relationship. For children, for example, this is 400,000 euros. If the property is worth less after a professional valuation, no inheritance tax is payable. Siblings of the deceased have an exemption limit of 20,000 euros. If the property is worth more, inheritance tax must be paid. In any case, consult a tax professional to find out whether you are liable for tax and, if so, how much.

Property and community of heirs

The community of heirs must decide together what is to become of the jointly inherited property. If one person wants to keep the property, they must pay out the co-heirs. The basis for this is again a valuation by a real estate professional. The same applies if the property is to be sold. Is it worth leasing the property? Or can the property be divided? To find out what the best solution is for your property, you should seek advice from a local quality estate agent. If the heirs cannot come to an agreement, there is a risk of forced sale. This is best avoided, as properties are often auctioned off below their value.

Costs for land inheritance

Heirs must pay property tax. In addition, the transfer of ownership from the testator to the heir must be documented in the land register. If this is done within two years, there are no fees. However, a certificate of inheritance may be required for a transfer of ownership, for example if there is no will. The fees for this depend on the amount of the inheritance.

Are you unsure what to do with your property? Get in touch with us! We will be happy to advise you.

Notes

For reasons of better readability, the generic masculine is used in this text. Female and other gender identities are explicitly included where this is necessary for the statement.

Legal notice: This article does not constitute tax or legal advice in individual cases. Please consult a lawyer and/or tax advisor to clarify the facts of your specific individual case.

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