
How to arrange your real estate inheritance during your lifetime
An inheritance, such as real estate or other assets, can be transferred from the owner to another person by way of a gift. If the recipient of the gift is the person who would have inherited the assets anyway, this is referred to as anticipated succession. A common example of this is when an owner transfers their real estate to their child during their lifetime.
The gift agreement
A notarized gift agreement is required for the gift to be legally valid. In addition to the object of the gift, any consideration is also recorded in the agreement.
These considerations may include, for example, that the donor can demand a right of reclaim. This means that if the recipient of the gift falls into financial difficulties, the donor can reclaim the property. This protects the property if financial claims are made against the recipient of the gift.
Continue living in your home with a right of residence or usufruct
In the case of a gift, it is also possible to agree on a right of residence or usufruct. This protects the donor, who can continue to live in the property. Another consideration would be to include care in old age in the gift agreement.
How high is the tax allowance?
The amount of the tax allowance depends on the degree of kinship. For spouses, this is €500,000, and for children, €400,000. If the value of the property exceeds this allowance, taxes must be paid. The allowances for more distant relatives are correspondingly lower.
It is therefore interesting to know how taxes can be avoided. No tax is payable under the following conditions: If only parts of the property are gifted at intervals of ten years and their value remains below the exemption amounts.
How much is the property worth?
In order to know how much tax will be payable, you need to know the value of the property, as this determines the amount. To determine this accurately, you should consult a reputable real estate agent who is familiar with the local area and market. Thanks to their many years of experience and expertise, they can provide you with the best possible valuation of your property and know exactly what to look out for.
Would you like to have your property professionally valued? Contact us! We will be happy to advise you.
Note
For reasons of better readability, the generic masculine form is used in this text. Female and other gender identities are expressly included insofar as this is necessary for the statement.
Legal notice: This article does not constitute tax or legal advice in individual cases. Please have the facts of your specific case clarified by a lawyer and/or tax advisor.