Property Inherited: The Right Steps
in the right order.
An inherited house represents both an asset and a responsibility: deadlines apply, costs arise, and tax decisions are set at an early stage. This guide sets out the steps – from accepting the inheritance, through the land register and inheritance tax, to the decision: keep, let, or sell.
Check first, then accept: the six-week deadline
Upon inheritance, the property automatically passes to the heirs – along with all debts. It is therefore essential to check first: how high are the land charges and outstanding loans (land register, Section III), is there a backlog of renovation work, are there existing tenancies? If the estate as a whole is over-indebted, the inheritance can be disclaimed within six weeks of becoming aware of it (§ 1944 BGB) – the deadline is short and often begins earlier than expected. After that: switch the building insurance to your own name, secure ongoing costs, and gather important documents (land register extract, energy performance certificate, tenancy agreements, loan agreements).
Correcting the land register – often without a certificate of inheritance
The land register must be updated to reflect the heirs. A common misconception is that a certificate of inheritance is always required for this. In fact, the land registry office generally accepts a notarial will or a contract of inheritance together with the court's record of opening, (§ 35 GBO) – making the costly certificate of inheritance regularly unnecessary. Only in the case of a private, handwritten will or statutory succession is a certificate of inheritance usually unavoidable. Important: The correction of the land register is free of charge, if the application is submitted within two years of the inheritance. As a notarial office, we prepare the application in full.
Taxes: allowances, family home, speculation period
- Inheritance tax allowances: spouses €500,000, children €400,000 (per parent), grandchildren €200,000. Only amounts exceeding these thresholds are subject to tax; for real estate, the tax office applies the market value.
- Family home: The property occupied by the deceased themselves remains, for spouses – and for children up to 200 m² of living space – tax-free, provided the acquirer moves in without delay and ten years continues to live there. Anyone who moves out or sells beforehand loses the exemption retroactively.
- Rented residential properties are only assessed at 90% of their value (10% reduction, § 13d ErbStG).
- Capital gains tax on sale: The ten-year period under § 23 EStG does not start afresh – you step into the period of the deceased . If they owned the property for more than ten years or lived in it themselves, the sale is generally exempt from income tax.
Keep, let, or sell?
The decision is both economic and emotional. Objectively, the following should be considered: neutral market value (an expert valuation rather than gut feeling), refurbishment and energy costs, achievable rent versus management effort, your own financing, and the tax consequences from Step 3. If the decision is to sell, the process proceeds via the notarial purchase agreement – the process from drafting to land register entry is explained in our Property Purchase Guide.
The Inherited Property in the Community of Heirs
If several persons inherit, no one alone sell, let or encumber it – all decisions are made jointly. This is where most conflicts arise, potentially leading to a value-destroying partition sale. Our guide shows you the options available and how to make the most of them Guide to Inheritance Communities.
Briefly answered
Do I always need a certificate of inheritance?
No. If a notarial will or an inheritance contract with a court record of opening is available, this is generally sufficient for the Land Registry as proof of inheritance (§ 35 GBO). A certificate of inheritance is mainly required in the case of a handwritten will or statutory succession – banks, too, frequently accept the opened notarial will.
What does re-registering the Land Registry entry cost?
If the correction of the Land Registry entry is applied for within two years of the inheritance, it is free of charge. After that, fees are charged according to the value of the property. However, costs may arise for proof of inheritance – for example, for a certificate of inheritance if no notarial will exists.
Do I have to pay inheritance tax?
Only to the extent that the acquisition exceeds your tax-free allowance: €500,000 for spouses, €400,000 per child and parent, €200,000 for grandchildren. The self-occupied family home remains additionally tax-exempt under the conditions of § 13 ErbStG (immediate occupation, ten years of personal use); rented residential property receives a 10% reduction.
Is income tax payable on the sale of the inherited property?
The decisive factor is the speculation period of the deceased: you take over their date of acquisition (§ 23 EStG). If the purchase was more than ten years ago, or if the deceased personally occupied the property in the year of the inheritance and the two preceding years, the sale is generally tax-free.
What happens to the ongoing land charge and the loan?
Loans taken out by the deceased pass to the heirs; the land charge remains registered in the land register. Clarify with the bank whether the loan is to be continued, refinanced or – for example upon sale – redeemed. In the case of an over-indebted estate, disclaimer of the inheritance within six weeks should be considered.
Inherited property – we take care of everything for you.
Proof of inheritance, land register, tax questions, sale or division of the estate: a notarial office and specialist law firm for inheritance law under one roof.