Why a lifelong right of residence?

A lifelong right of residence allows people to live in a property without owning it or paying rent for it. Securing this right can make sense in various situations, for example in the event of a gift or property retirement. There are a few details to bear in mind. So how does a lifelong right of residence work?

Rents are rising and living space is scarce. This is why many people - especially senior citizens - are wondering how they can secure their living space even if they sell or dispose of their own property. A lifelong right of residence is the solution here. Anyone who has this right may live in the house or apartment in question until the end of their life, even if they are no longer the owner. The right of residence is firmly tied to the property. If the property is sold again, the owner of the right of residence can still live in it.

Gift or annuity

A lifelong right of residence can be agreed, for example, if parents want to transfer their house to their child in order to save inheritance tax but still want to live in it. Another option is a property annuity. Here, owners can turn their property into an "annuity in stone" - and remain living in it with a lifelong right of residence. You can receive the money for your property as a one-off payment or as a monthly pension - or as a mixture of the two.

Have right of residence entered in the land register

If you have a right of residence, you should have it entered in the land register. This is the only way to legally secure it. If it is not entered in the land register, it can be contested or even revoked in the event of a change of ownership, for example. If, on the other hand, the lifelong right of residence is entered in the land register, it cannot be withdrawn or terminated by the holder of the right of residence. It also makes sense to have a right of reclaim granted. This means that the property can be reclaimed if the children to whom it was transferred as a gift become insolvent. The property is then protected from enforcement and goes back to the parents instead.

Usufruct instead of right of residence

In contrast to the right of residence, the usufruct right includes a right to use a property. This right is useful, for example, if the owner of the right of residence becomes in need of care and has to be looked after in a nursing home. In this case, the right of residence is of little use. The usufructuary right, on the other hand, also allows him to rent out the rooms that he cannot or does not want to live in himself. He may be able to use the rental income to finance the care costs, but even if he emigrates or is away from his home for a longer period of time, he will still have a source of income from renting it out. However, the holder of the usufructuary right also bears economic responsibility for the property and must assume the management and maintenance costs incurred.

Would you like to know whether a lifelong right of abode is worthwhile for you and your property? Get in touch with us! We will be happy to advise you.

You need further information:

https://www.wohnen-im-alter.de/geld-recht/vorsorge/lebenslanges-wohnrecht

https://praxistipps.focus.de/lebenslanges-wohnrecht-diese-rechte-und-pflichten-stecken-dahinter_124027

https://www.presseportal.de/pm/82277/4638514

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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