Higher taxes on real estate: Six saving tips for your inheritance

Created: 01/16/2023 11:49 am

Property owners should take care of the regulation of the inheritance at an early stage.

A tax expert explains how heirs can save a lot on taxes.

Munich – It came as a shock to many real estate owners when the news broke last fall that the inheritance of real estate will probably be taxed higher from 2023.

Although the inheritance tax itself will not be increased, the standards according to which properties to be inherited are valued are changing.

And that means that up to 100 percent more inheritance tax may be due.

New tax regulations: In 2023 it will often be more expensive to inherit real estate

As a result of the reports, some property owners quickly overwrote properties in the old year.

Whether that was wise remains to be seen.

Such important decisions should not be made in haste.

Because before a transfer, many questions should be clarified: What happens to the current residents of the house in the case of care?

What if there is a quarrel in the family?

What happens in the event of separation and divorce?

There are no patent solutions for this: Because every family, every case is different.

Therefore, a decision-making process takes time and often good advice.

In the best case from an expert like Paul Grötsch, specialist lawyer for inheritance law and managing director of the German Forum for Inheritance Law there are changes that have a negative impact on an inheritance.” It should also be borne in mind that it is questionable whether the allowances will increase in line with inflation.

Grötsch: "The last change to the allowances was in 2009."

Inheriting real estate: Tax experts give tips

Incidentally, the expert does not assume that the higher inheritance tax will necessarily lead to a house sale: "If you inherit something, you have to pay 30 percent tax in the worst case, so you still have 70 percent equity - that's how you can buy a house mostly finance.

Of course you have to bear the costs for this, but that is possible in most cases.” Grötsch also recommends that you not only pay attention to the tax when determining the estate, but also to the circumstances: From his experience, the best tax solution is not always the best also the most sensible solution.

Because if they cause a dispute, it could cause far greater financial damage.

For the

, the expert summarizes the most important rules for inheritance:

1. Get advice

Inheritance law is complicated and treacherous.

Teller mines are lurking everywhere: under civil law and tax law.

90 percent of testamentary dispositions are unclear, unreasonable or even ineffective.

Therefore, be sure to seek advice from a specialist!

The specialist lawyers for inheritance law are primarily responsible.

Anyone who is afraid of the consulting costs should ask them, says Grötsch.

"Tell me what it's about.

After that, you should be able to get information from any good inheritance law firm about the cost of an initial consultation in which the problems are clarified.” The costs for the actual consultation then usually depend on the amount of assets and the effort involved.

Grötsch's tip: Agree on a flat rate.

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2. The will

The last will can be enforced by a private written or notarial will or by a notarial contract of inheritance.

Caution: The contract of inheritance is binding.

Some have already regretted graduating.

As a rule, it is better to only draw up a will, which you can change again at any time.

Important: "The most unusual will is useless if it is not found after the death of the testator," warns Grötsch.

His tip: "Deposit your will with the probate court." It costs 75 euros.

The inclusion of the will in the probate register costs 18 euros per person.

In the event of death, the probate court (to which the place of residence of the deceased belongs) retrieves the will or wills.

It is also important, 

3. Who Should Make a Will?

Grötsch: “Basically everyone who has children.

Because if you die as a young person, the children inherit alongside the spouse.

And that can get complicated.

For example, if there is real estate, you need court approvals or a supplementary caretaker if you want to dispose of it.

This can be avoided by ensuring in the will that the parent who has lived longer can freely dispose of it – independently of third parties.

But that doesn't mean the kids don't get anything.

Then you can avoid the associated difficulties, for example by appointing an executor.” 

4. Check your own regulations regularly

In some cases, wills were made when the (real estate or gold) values ​​were not that high.

If the will was drawn up in 1995, for example, many would not have given it much thought, says Grötsch.

However, the problem is then often that one thinks that everything is settled and forgets that the will should perhaps be updated and adjusted.

Grötsch recommends checking the will every three to five years or when there are economic changes.

If you change something, you should either send a completely new will or (for example, if it is only a matter of small things) only an amending will to the probate court.

It may also make sense to pick up the Old Testament again.

Because if, for example, a friend is considered in the first will, who then gets nothing more in the second will, then if there is a change, he will still find out that he should inherit because the will is sent to him as the named person.

5. The most common mistake

Grötsch: "That's the idea of ​​not making a will at all." Because without a will, the legal succession applies, often with unpleasant surprises.

For example, childless spouses do not inherit each other alone, but the survivor inherits together with his or her father-in-law or brother-in-law.

Statutory succession often also means the formation of a community of heirs, a source of conflict of the first order.

A wise will helps to establish peace, for example by means of a partition order, a legacy, a legacy in advance or a so-called usufruct legacy.

6. What else should you pay attention to?

Spouses can dispose of their assets together in a so-called joint will.

However, a very important point is often overlooked: Can the survivor change the jointly agreed rules for his inheritance?

A difficult decision because it's about the future that you don't know.

The spouses need to know whether they want to give each other freedom of disposal or whether they want to stick to the arrangement, that is, bind the survivor.

Grötsch: "That's especially important for younger people who, if their partner died in an accident, for example, will live for another 30 or 40 years, and who would then like to make their inheritance completely different, but can't." However, older people can also be protected by a joint will, for example against change requests from inheritance smugglers.”