Inheritance: time limits and allowances

Anyone who makes an inheritance is careful with the money blessing or the property received - also from a tax perspective.

You inherit a property, want to move in there yourself and pay out the co-heirs? You can use your Bauspar contract for this, since the payment is equivalent to an acquisition.

Increase value

You can use the money blessing from an inheritance, for example, to beautify your home, to renovate it energetically or to expand it. In the course of the upcoming modernization, the age-appropriate conversion can also be carried out at a time when you are doing well. This increases the attitude towards life and the value of the property.

Note the deadline

If the inherited family home is rented, sold or used as a second home immediately or within the ten-year period, inheritance tax is payable - provided the personal allowance is exceeded. Tax exemption applies to children if the living space of the property is no more than 200 square meters. Larger properties are subject to tax on a pro rata basis. However, the child claims his allowance of 400, 000 euros. In the event of inheritance, real estate is treated for tax purposes like financial assets - the market value applies.

Free

The allowances apply to inheritances and gifts. The Treasury grants new donations every ten years. It can therefore be worthwhile to transfer your assets in increments during your lifetime (see interview with experts).

A gift is tax-free during your lifetime if the property is owner-occupied and the recipient is the spouse or registered partner.

Not hasty

After a transfer to the children, for example, parents can no longer sell their house or charge for loans. Anyone who gives away their property should therefore secure usufruct or a pension, both secured in the land register. In relation to the right to live, usufruct entitles the holder to generate rental income if the right to live can no longer be exercised due to old age or illness.

Inheritance and gift - the allowances

Allowance	Degree of kinship
500, 000 euros	Spouse / same-sex partner
400, 000 euros	Children and stepchildren
400, 000 euros	Grandson / step-grandson if the testator's child has already died
200, 000 euros	all other grandchildren and step-grandchildren
100, 000 euros	Great-grandchildren
100, 000 euros	Parents and grandparents on inheritance
20, 000 euros	Parents and grandparents in the gift case, siblings, nephews and nieces, step-parents, children-in-law, parents-in-law and divorced spouses
20, 000 euros	all other buyers

Source: German Forum for Inheritance Law

In this post you read:

• Use money blessings cleverly
• Deadlines and allowances
• Why it is so delicate for families